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Investment Agreement - ANHEUSER-BUSCH INBEV S.A. - 3-24-1994

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Investment Agreement - ANHEUSER-BUSCH INBEV S.A. - 3-24-1994 Powered By Docstoc
					EX-10.19 EXECUTION COPY INVESTMENT AGREEMENT By and Among ANHEUSER-BUSCH COMPANIES, INC., ANHEUSER-BUSCH INTERNATIONAL, INC. and ANHEUSER-BUSCH INTERNATIONAL HOLDINGS, INC. and GRUPO MODELO, S.A. DE C.V., DIBLO, S.A. DE C.V. and CERTAIN SHAREHOLDERS THEREOF Dated as of June 16, 1993

TABLE OF CONTENTS I. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . 2 II. TERMS OF THE SUBSCRIPTION OF SERIES P-C SHARES AND THE PURCHASE AND SALE OF INITIAL DIBLO COMMON SHARES
2.1 Subscription of Series P-C Shares and Purchase and Sale of the Initial Diblo Common Shares. . . . . . . . . The Closing. . . . . . . . . . . . . Purchase Price . . . . . . . . . . . Deliveries at the Closing. . . . . .

2.2 2.3 2.4

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7 8 8 8

III. REPRESENTATIONS AND WARRANTIES OF THE G-MODELO SIGNATORIES
3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 Capital Stock of G-Modelo. . . . . . . . Capital Stock of Diblo and the G-Modelo Corporations . . . . . . . . . . . . . . USA Export . . . . . . . . . . . . . . . Power and Authority; Effect of Agreement Investments. . . . . . . . . . . . . . . Organization; Assets . . . . . . . . . . Financial Information. . . . . . . . . . Undisclosed Liabilities; Absence of Certain Changes. . . . . . . . . . . . . Title and Related Matters. . . . . . . . Patents, Trademarks, Etc.. . . . . . . . . . 11 . . . . . . . . . . . . 13 15 16 17 17 18

. . 19 . . 20 . . 20

TABLE OF CONTENTS I. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . 2 II. TERMS OF THE SUBSCRIPTION OF SERIES P-C SHARES AND THE PURCHASE AND SALE OF INITIAL DIBLO COMMON SHARES
2.1 Subscription of Series P-C Shares and Purchase and Sale of the Initial Diblo Common Shares. . . . . . . . . The Closing. . . . . . . . . . . . . Purchase Price . . . . . . . . . . . Deliveries at the Closing. . . . . .

2.2 2.3 2.4

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7 8 8 8

III. REPRESENTATIONS AND WARRANTIES OF THE G-MODELO SIGNATORIES
3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 Capital Stock of G-Modelo. . . . . . . . Capital Stock of Diblo and the G-Modelo Corporations . . . . . . . . . . . . . . USA Export . . . . . . . . . . . . . . . Power and Authority; Effect of Agreement Investments. . . . . . . . . . . . . . . Organization; Assets . . . . . . . . . . Financial Information. . . . . . . . . . Undisclosed Liabilities; Absence of Certain Changes. . . . . . . . . . . . . Title and Related Matters. . . . . . . . Patents, Trademarks, Etc.. . . . . . . . Litigation . . . . . . . . . . . . . . . Compliance with Laws . . . . . . . . . . Tax Matters. . . . . . . . . . . . . . . Shareholder Agreements . . . . . . . . . Consents . . . . . . . . . . . . . . . . Environmental Matters. . . . . . . . . . Absence of Certain Changes or Events . . Material Contracts . . . . . . . . . . . Employee Benefits; Employment Contracts. Real Property. . . . . . . . . . . . . . Tied House Prohibitions. . . . . . . . . Insurance. . . . . . . . . . . . . . . . . . 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 15 16 17 17 18 19 20 20 22 22 23 24 25 25 26 26 27 28 29 29

i

IV. REPRESENTATIONS AND WARRANTIES OF A-B, A-BI AND THE INVESTOR
4.1 4.2 4.3 4.4 Corporate Power and Authority; of Agreement . . . . . . . . . Consents . . . . . . . . . . . Availability of Funds. . . . . Management of G-Modelo and the Corporations . . . . . . . . . Effect . . . . . . . . . . . . . . . G-Modelo . . . . .

. . 30 . . 31 . . 31 . . 31

V. COVENANTS OF THE PARTIES
5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 Access to Information. . . . . . . Further Assurances . . . . . . . . Filings; Tax Returns . . . . . . . Internal Reorganization. . . . . . Election of A-B Director . . . . . Environmental and Safety Laws. . . USA Export Agreement . . . . . . . Consummation of Public Offerings; Registration of Shares . . . . . . Dividend Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 33 34 35 36 36 37

. . . . . 37 . . . . . 38

IV. REPRESENTATIONS AND WARRANTIES OF A-B, A-BI AND THE INVESTOR
4.1 4.2 4.3 4.4 Corporate Power and Authority; of Agreement . . . . . . . . . Consents . . . . . . . . . . . Availability of Funds. . . . . Management of G-Modelo and the Corporations . . . . . . . . . Effect . . . . . . . . . . . . . . . G-Modelo . . . . .

. . 30 . . 31 . . 31 . . 31

V. COVENANTS OF THE PARTIES
5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 Access to Information. . . . . . . . Further Assurances . . . . . . . . . Filings; Tax Returns . . . . . . . . Internal Reorganization. . . . . . . Election of A-B Director . . . . . . Environmental and Safety Laws. . . . USA Export Agreement . . . . . . . . Consummation of Public Offerings; Registration of Shares . . . . . . . Dividend Policies. . . . . . . . . . Equity Participations. . . . . . . . Operation of G-Modelo. . . . . . . . Government Officials . . . . . . . . Sale of Series C Shares to Employees Real Estate Transfers. . . . . . . . Technical Committees . . . . . . . . Failure by the Investor to Acquire all Diblo Option Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 33 34 35 36 36 37 37 38 41 41 41 42 42 42

. . . . 43

VI. TRANSFER, SALE AND PURCHASE RIGHTS
6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 General. . . . . . . . . . . . . . . . Offer to Sell; Right of First Refusal. The Investor's Option to Purchase Shares of G-Modelo Capital Stock . . . The Investor's Option to Purchase Diblo Common Shares. . . . . . . . . . Consequences of Failure to Convert Series P-C Shares. . . . . . . . . . . Restriction on Dispositions to Competitors. . . . . . . . . . . . . . Restrictions on Acquiring Series C Shares . . . . . . . . . . . . . . . . Extension of Time Periods. . . . . . . . . . 44 . . . 45 . . . 49 . . . 52 . . . 54 . . . 59 . . . 59 . . . 59

ii

VII. BOARDS OF DIRECTORS; VOTING 7.1 Boards of Directors. . . . . . . . . . . . . 60 7.2 Corporate Actions. . . . . . . . . . . . . . 62 VIII. CONDITIONS TO THE INVESTOR'S OBLIGATIONS
8.1 8.2 8.3 8.4 8.5 8.6 Representations, Warranties of G-Modelo Signatories . . . . . No Prohibition . . . . . . . . No Action. . . . . . . . . . . HSR Act. . . . . . . . . . . . Certificates . . . . . . . . . Opinion. . . . . . . . . . . . the . . . . . . . . . . . .

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68 68 69 69 69 69

VII. BOARDS OF DIRECTORS; VOTING 7.1 Boards of Directors. . . . . . . . . . . . . 60 7.2 Corporate Actions. . . . . . . . . . . . . . 62 VIII. CONDITIONS TO THE INVESTOR'S OBLIGATIONS
8.1 8.2 8.3 8.4 8.5 8.6 Representations, Warranties of G-Modelo Signatories . . . . . No Prohibition . . . . . . . . No Action. . . . . . . . . . . HSR Act. . . . . . . . . . . . Certificates . . . . . . . . . Opinion. . . . . . . . . . . . the . . . . . . . . . . . .

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68 68 69 69 69 69

IX. CONDITIONS TO THE G-MODELO SIGNATORIES' AND THE BANAMEX TRUST'S OBLIGATIONS
9.1 9.2 9.3 9.4 9.5 9.6 Representations and Warranties A-BI and the Investor. . . . . No Prohibition . . . . . . . . No Action. . . . . . . . . . . HSR Act. . . . . . . . . . . . Certificates . . . . . . . . . Opinion. . . . . . . . . . . . of A-B, . . . . . . . . . . . . . . . . . . . . . . . .

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69 70 70 70 70 70

X. INDEMNIFICATION 10.1 The Controlling Shareholders', G-Modelo
and Diblo Indemnification. . . The Investor's Indemnification Conditions of Indemnification. Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 71 72 73

10.2 10.3 10.4

XI. TERMINATION PRIOR TO CLOSING 11.1 Termination. . . . . . . . . . . . . . . . . 73 11.2 Procedure and Effect of Termination. . . . . 74 XII. DISPUTE RESOLUTION 12.1 Arbitration. . . . . . . . . . . . . . . . . 75 12.2 Business Disagreements . . . . . . . . . . . 76 XIII. MISCELLANEOUS 13.1 Survival of Representations, Warranties and Covenants. . . . . . . . . . . . . . . . 78 13.2 Entire Agreement . . . . . . . . . . . . . . 78 iii
13.3 13.4 13.5 13.6 13.7 13.8 13.9 Successors and Assigns . . . . Counterparts . . . . . . . . . Interpretation . . . . . . . . Amendment and Modification . . Waiver of Compliance; Consents Broker's Fees. . . . . . . . . Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 79 79 79 79 80 80

13.3 13.4 13.5 13.6 13.7 13.8 13.9 13.10 13.11 13.12

Successors and Assigns . . . . Counterparts . . . . . . . . . Interpretation . . . . . . . . Amendment and Modification . . Waiver of Compliance; Consents Broker's Fees. . . . . . . . . Expenses . . . . . . . . . . . Notices. . . . . . . . . . . . Governing Law. . . . . . . . . Public Announcements . . . . .

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78 79 79 79 79 80 80 80 82 82

SIGNATURES

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EXHIBIT A EXHIBIT B EXHIBIT C EXHIBIT D EXHIBIT E

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EXHIBIT F EXHIBIT G

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Capital Stock of G-Modelo as of Closing Calculation of G-Modelo Free Cash Flow Procermex Pricing Policies Opinion of Santamarina Y Steta, S.C. Opinion of Stephen J. Volland, Esq., Senior Associate General Counsel of Anheuser-Busch Companies, Inc. Opinion of Skadden, Arps, Slate, Meagher & Flom Opinion of Creel, Garcia-Cuellar y Muggenburg

SCHEDULES Schedule 3.2(a) Schedule 3.2(c) Schedule 3.10 Schedule 3.11 Schedule 3.17 Schedule 3.18 Schedule 3.19 iv

INVESTMENT AGREEMENT THIS INVESTMENT AGREEMENT, made and entered into as of this 16th day of June, 1993, by and among ANHEUSER-BUSCH COMPANIES, INC., a Delaware corporation ("A-B"), ANHEUSER-BUSCH INTERNATIONAL, INC., a Delaware corporation ("A-BI"), ANHEUSER-BUSCH INTERNATIONAL HOLD- INGS, INC., a Delaware corporation (the "Investor"), and the other signatories hereto set forth on the signature pages of this Investment Agreement (such signatories other than the Option Trust and the Banamex Trust are hereinafter referred to collectively as the "G-Modelo Signatories"); W I T N E S S E T H: WHEREAS, Srs. Antonino Fernandez R., Pablo Aramburuzabala, Nemesio Diez R., Juan Sanchez-Navarro y P. and Valentin Diez M. have transferred and caused each of the other shareholders (collectively, the "Controlling Shareholders") of Diblo, S.A. de C.V., a Mexican corpora- tion ("Diblo"), to transfer to Grupo Modelo, S.A. de C.V., a Mexican corporation ("G-Modelo"), approximately 75 percent of the issued and outstanding shares of capi- tal stock of Diblo, in exchange for 169,701,202 common shares of G-Modelo; and WHEREAS, the Controlling Shareholders have caused each of Consorcio Distributivo, S.A. de C.V., a Mexican corporation ("Consorcio"), and Expansion Inte- gral, S.A. de C.V., a Mexican corporation ("Expansion"), to merge into Diblo, which is now the owner of all of the outstanding shares of capital stock of all of the former subsidiaries of Consorcio and Expansion which the latter two owned prior to such merger; and

INVESTMENT AGREEMENT THIS INVESTMENT AGREEMENT, made and entered into as of this 16th day of June, 1993, by and among ANHEUSER-BUSCH COMPANIES, INC., a Delaware corporation ("A-B"), ANHEUSER-BUSCH INTERNATIONAL, INC., a Delaware corporation ("A-BI"), ANHEUSER-BUSCH INTERNATIONAL HOLD- INGS, INC., a Delaware corporation (the "Investor"), and the other signatories hereto set forth on the signature pages of this Investment Agreement (such signatories other than the Option Trust and the Banamex Trust are hereinafter referred to collectively as the "G-Modelo Signatories"); W I T N E S S E T H: WHEREAS, Srs. Antonino Fernandez R., Pablo Aramburuzabala, Nemesio Diez R., Juan Sanchez-Navarro y P. and Valentin Diez M. have transferred and caused each of the other shareholders (collectively, the "Controlling Shareholders") of Diblo, S.A. de C.V., a Mexican corpora- tion ("Diblo"), to transfer to Grupo Modelo, S.A. de C.V., a Mexican corporation ("G-Modelo"), approximately 75 percent of the issued and outstanding shares of capi- tal stock of Diblo, in exchange for 169,701,202 common shares of G-Modelo; and WHEREAS, the Controlling Shareholders have caused each of Consorcio Distributivo, S.A. de C.V., a Mexican corporation ("Consorcio"), and Expansion Inte- gral, S.A. de C.V., a Mexican corporation ("Expansion"), to merge into Diblo, which is now the owner of all of the outstanding shares of capital stock of all of the former subsidiaries of Consorcio and Expansion which the latter two owned prior to such merger; and WHEREAS, A-B and the Controlling Shareholders desire to create an association or joint venture to conduct and expand G-Modelo's and Diblo's current busi- nesses, which shall be managed by the Controlling Shareholders, with the participation of A-B, A-BI and the Investor as provided in this Agreement; and WHEREAS, in furtherance of and in consideration for the creation of such association or joint venture, the Investor desires, among other things, (i) to sub- scribe and fully pay for 20,323,498 shares of Series P-C Convertible Preferred Stock, no par value (the "Series P-

C Shares"), of G-Modelo, representing all of the autho- rized Series PC Shares of GModelo, which Series P-C Shares represent in excess of 10 percent of the total outstanding capital stock of G-Modelo and which shall be part of G-Modelo's Class II capital stock, and (ii) to purchase from Banco Nacional de Mexico, S.A., as Trustee of the Trust (the "Banamex Trust") established under the Trust Agreement dated as of November 28, 1991, as amended and restated on June 11, 1993 (the "Banamex Trust Agree- ment"), among the Controlling Shareholders and the Trust- ee of the Banamex Trust, and the Trustee of the Banamex Trust desires to sell to the Investor, 24,329,922 shares (the "Initial Diblo Shares") of Series B Common Stock, no par value (the "Diblo Series B Shares"), of Diblo, which Initial Diblo Shares represent in excess of 10 percent of the total outstanding capital stock of Diblo and which shall be part of Diblo's Class II capital stock; NOW, THEREFORE, in consideration of the forego- ing premises and the respective representations, warranties, covenants and agreements, and upon the terms and subject to the conditions hereinafter set forth, and intending to be legally bound hereby the parties do hereby agree as follows: ARTICLE I DEFINITIONS Capitalized terms used herein shall have the meaning ascribed to them in this Article I unless such terms are defined elsewhere in this Agreement. 1.1. A-B. "A-B" shall have the meaning set forth in the first paragraph of this Agreement. 1.2. A-BI. "A-BI" shall have the meaning set

C Shares"), of G-Modelo, representing all of the autho- rized Series PC Shares of GModelo, which Series P-C Shares represent in excess of 10 percent of the total outstanding capital stock of G-Modelo and which shall be part of G-Modelo's Class II capital stock, and (ii) to purchase from Banco Nacional de Mexico, S.A., as Trustee of the Trust (the "Banamex Trust") established under the Trust Agreement dated as of November 28, 1991, as amended and restated on June 11, 1993 (the "Banamex Trust Agree- ment"), among the Controlling Shareholders and the Trust- ee of the Banamex Trust, and the Trustee of the Banamex Trust desires to sell to the Investor, 24,329,922 shares (the "Initial Diblo Shares") of Series B Common Stock, no par value (the "Diblo Series B Shares"), of Diblo, which Initial Diblo Shares represent in excess of 10 percent of the total outstanding capital stock of Diblo and which shall be part of Diblo's Class II capital stock; NOW, THEREFORE, in consideration of the forego- ing premises and the respective representations, warranties, covenants and agreements, and upon the terms and subject to the conditions hereinafter set forth, and intending to be legally bound hereby the parties do hereby agree as follows: ARTICLE I DEFINITIONS Capitalized terms used herein shall have the meaning ascribed to them in this Article I unless such terms are defined elsewhere in this Agreement. 1.1. A-B. "A-B" shall have the meaning set forth in the first paragraph of this Agreement. 1.2. A-BI. "A-BI" shall have the meaning set forth in the first paragraph of this Agreement. 1.3. Amended Diblo By-laws. "Amended Diblo By-laws" shall mean the By-laws of Diblo as amended and provided to the Investor pursuant to Section 2.4(b)(v). 1.4. Amended G-Modelo By-laws. "Amended G-Modelo By-laws" shall mean the By-laws of G-Modelo as amended and provided to the Investor pursuant to Section 2.4(b)(v). 2 1.5. Banamex Trust. "Banamex Trust" shall have the meaning set forth in the fourth preamble of this Agreement. 1.6. Banamex Trust Agreement. "Banamex Trust Agreement" shall have the meaning set forth in the fourth preamble of this Agreement. 1.7. Closing. "Closing" shall mean the com- pletion of the purchase and sale of the Series P-C Shares and the Initial Diblo Shares. 1.8. Closing Date. "Closing Date" shall mean the date on which the Closing occurs. 1.9. C&L. "C&L" shall mean Despacho Roberto Casas Alatriste, S.C., the Mexican affiliate of Coopers & Lybrand, independent certified public accountants for G-Modelo and the G-Modelo Corporations or such other Mexican affiliate of a "Big 6" international accounting firm appointed by the G-Modelo Board of Directors to audit the accounts of G-Modelo and the G-Modelo Corpora- tions. 1.10. Consorcio. "Consorcio" shall have the meaning set forth in the second preamble of this Agreement. 1.11. Controlling Shareholders. "Controlling Shareholders" shall have the meaning set forth in the first preamble of this Agreement.

1.5. Banamex Trust. "Banamex Trust" shall have the meaning set forth in the fourth preamble of this Agreement. 1.6. Banamex Trust Agreement. "Banamex Trust Agreement" shall have the meaning set forth in the fourth preamble of this Agreement. 1.7. Closing. "Closing" shall mean the com- pletion of the purchase and sale of the Series P-C Shares and the Initial Diblo Shares. 1.8. Closing Date. "Closing Date" shall mean the date on which the Closing occurs. 1.9. C&L. "C&L" shall mean Despacho Roberto Casas Alatriste, S.C., the Mexican affiliate of Coopers & Lybrand, independent certified public accountants for G-Modelo and the G-Modelo Corporations or such other Mexican affiliate of a "Big 6" international accounting firm appointed by the G-Modelo Board of Directors to audit the accounts of G-Modelo and the G-Modelo Corpora- tions. 1.10. Consorcio. "Consorcio" shall have the meaning set forth in the second preamble of this Agreement. 1.11. Controlling Shareholders. "Controlling Shareholders" shall have the meaning set forth in the first preamble of this Agreement. 1.12. Control Trust. "Control Trust" shall mean the trust established under the Control Trust Agree- ment. 1.13. Control Trust Agreement. "Control Trust Agreement" shall mean the agreement dated as of June 11, 1993, among the Controlling Shareholders, A-B and Banco Nacional de Mexico, S.A., as Trustee for the Control Trust. 1.14. Diblo. "Diblo" shall have the meaning set forth in the first preamble of this Agreement. 1.15. Diblo Series A Shares. "Diblo Series A Shares" shall be the Class I authorized shares of Series A Common Stock, no par value, of Diblo. 3 1.16. Diblo Series B Shares. "Diblo Series B Shares" shall have the meaning set forth in the fourth preamble of this Agreement. 1.17. Diblo P-C Shares. "Diblo P-C Shares" shall mean the Class II authorized shares of Series P-C Convertible Preferred Stock, no par value, of Diblo. 1.18. Encumbrances. "Encumbrances" shall mean all liens, claims, options, security interests or other encumbrances of any character whatsoever. 1.19. Expansion. "Expansion" shall have the meaning set forth in the second preamble of this Agree- ment. 1.20. Free Exchange Rate. "Free Exchange Rate" shall mean the average of the U.S. dollar/Mexican Peso free exchange rates for the sale of U.S. dollars based on the amount of money to be converted quoted by Banco Nacional de Mexico, S.A. and Bancomer, S.A. at 10:00 a.m. on the date of payment for which such free exchange rate is being used. 1.21. G-Modelo. "G-Modelo" shall have the meaning set forth in the first preamble of this Agree- ment. 1.22. G-Modelo Corporations. "G-Modelo Corpo- rations" shall mean Diblo and the other Subsidiaries of GModelo. 1.23. G-Modelo Signatories. "G-Modelo Signa- tories" shall have the meaning set forth in the first paragraph of this Agreement.

1.16. Diblo Series B Shares. "Diblo Series B Shares" shall have the meaning set forth in the fourth preamble of this Agreement. 1.17. Diblo P-C Shares. "Diblo P-C Shares" shall mean the Class II authorized shares of Series P-C Convertible Preferred Stock, no par value, of Diblo. 1.18. Encumbrances. "Encumbrances" shall mean all liens, claims, options, security interests or other encumbrances of any character whatsoever. 1.19. Expansion. "Expansion" shall have the meaning set forth in the second preamble of this Agree- ment. 1.20. Free Exchange Rate. "Free Exchange Rate" shall mean the average of the U.S. dollar/Mexican Peso free exchange rates for the sale of U.S. dollars based on the amount of money to be converted quoted by Banco Nacional de Mexico, S.A. and Bancomer, S.A. at 10:00 a.m. on the date of payment for which such free exchange rate is being used. 1.21. G-Modelo. "G-Modelo" shall have the meaning set forth in the first preamble of this Agree- ment. 1.22. G-Modelo Corporations. "G-Modelo Corpo- rations" shall mean Diblo and the other Subsidiaries of GModelo. 1.23. G-Modelo Signatories. "G-Modelo Signa- tories" shall have the meaning set forth in the first paragraph of this Agreement. 1.24. Heads of Agreement. "Heads of Agree ment" shall mean the Heads of Agreement dated as of March 24, 1993, among A-B, A-BI, G-Modelo, Diblo and certain Controlling Shareholders. 1.25. HSR Act. "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. 4 1.26. Initial Diblo Shares. "Initial Diblo Shares" shall have the meaning set forth in the fourth preamble of this Agreement. 1.27. Internacionales. "Internacionales" shall mean Cervezas Internacionales, S.A. de C.V., a Mexican corporation and a Subsidiary of Diblo. 1.28. Investor. "Investor" shall have the meaning set forth in the first paragraph of this Agree- ment. 1.29. LRMI. "LRMI" shall mean the Law and Regulations to Promote Mexican Investment and Regulate Foreign Investment. 1.30. Mexican GAAP. "Mexican GAAP" shall mean Mexican generally accepted accounting principles. 1.31. Mexican Pesos. "Mexican Pesos" shall mean New Mexican pesos as of the date of this Agreement. 1.32. Option Shares. "Option Shares" shall have the meaning set forth in Section 6.3. 1.33. Option Trust. "Option Trust" shall mean the trust established under the Option Trust Agreement. 1.34. Option Trust Agreement. "Option Trust Agreement" shall mean the agreement dated as of June 11, 1993, among the Controlling Shareholders and Banco Nacional de Mexico, S.A., as Trustee for the Option Trust. 1.35. Person. The term "person" shall mean and include an individual, a partnership, a joint ven- ture, a corporation, a trust, an unincorporated organiza- tion and a government or any department or agency there- of. 1.36. Prime Rate. "Prime Rate" shall mean the rate published by the New York City Branch of Citibank, N.A. as its prime rate on the date on which interest is to begin to accrue.

1.26. Initial Diblo Shares. "Initial Diblo Shares" shall have the meaning set forth in the fourth preamble of this Agreement. 1.27. Internacionales. "Internacionales" shall mean Cervezas Internacionales, S.A. de C.V., a Mexican corporation and a Subsidiary of Diblo. 1.28. Investor. "Investor" shall have the meaning set forth in the first paragraph of this Agree- ment. 1.29. LRMI. "LRMI" shall mean the Law and Regulations to Promote Mexican Investment and Regulate Foreign Investment. 1.30. Mexican GAAP. "Mexican GAAP" shall mean Mexican generally accepted accounting principles. 1.31. Mexican Pesos. "Mexican Pesos" shall mean New Mexican pesos as of the date of this Agreement. 1.32. Option Shares. "Option Shares" shall have the meaning set forth in Section 6.3. 1.33. Option Trust. "Option Trust" shall mean the trust established under the Option Trust Agreement. 1.34. Option Trust Agreement. "Option Trust Agreement" shall mean the agreement dated as of June 11, 1993, among the Controlling Shareholders and Banco Nacional de Mexico, S.A., as Trustee for the Option Trust. 1.35. Person. The term "person" shall mean and include an individual, a partnership, a joint ven- ture, a corporation, a trust, an unincorporated organiza- tion and a government or any department or agency there- of. 1.36. Prime Rate. "Prime Rate" shall mean the rate published by the New York City Branch of Citibank, N.A. as its prime rate on the date on which interest is to begin to accrue. 5 1.37. PW. "PW" shall mean Price Waterhouse, independent certified public accountants for A-B and its Subsidiaries or such other "Big 6" international accounting firm appointed by the A-B Board of Directors to audit the accounts of A-B and its Subsidiaries. 1.38. Real Estate Trust. "Real Estate Trust" shall mean the trust established under the Real Estate Trust Agreement. 1.39. Real Estate Trust Agreement. "Real Estate Trust Agreement" shall mean the agreement dated as of January 22, 1993, among Diblo and Banco Nacional de Mexico, S.A., as Trustee of the Real Estate Trust. 1.40. Related Person. "Related Person" shall mean when used in reference to any other Person any Person who owns or holds ten percent or more of the outstanding capital stock of such other Person or is an officer, director or sole administrator of such other Person or in the case of a natural Person, his spouse, his or his spouse's children (including by adoption), his siblings (including half and step siblings), his estate and any trust entirely for the benefit of any one or more of himself or any of the foregoing individuals. 1.41. Series A Shares. "Series A Shares" shall mean the Class I and Class II authorized shares of Series A Common Stock, no par value, of G-Modelo. 1.42. Series B Shares. "Series B Shares" shall mean the 71,376,124 Class II shares of Series B Common Stock, no par value, of G-Modelo authorized for issuance upon conversion of shares of G-Modelo capital stock as provided in the Amended G-Modelo By-laws. 1.43. Series C Shares. "Series C Shares" shall mean the 40,646,995 authorized Class II shares of Series C NonVoting Stock, no par value, of G-Modelo. 1.44. Series P-C Shares. "Series P-C Shares" shall have the meaning set forth in the fourth preamble of this

1.37. PW. "PW" shall mean Price Waterhouse, independent certified public accountants for A-B and its Subsidiaries or such other "Big 6" international accounting firm appointed by the A-B Board of Directors to audit the accounts of A-B and its Subsidiaries. 1.38. Real Estate Trust. "Real Estate Trust" shall mean the trust established under the Real Estate Trust Agreement. 1.39. Real Estate Trust Agreement. "Real Estate Trust Agreement" shall mean the agreement dated as of January 22, 1993, among Diblo and Banco Nacional de Mexico, S.A., as Trustee of the Real Estate Trust. 1.40. Related Person. "Related Person" shall mean when used in reference to any other Person any Person who owns or holds ten percent or more of the outstanding capital stock of such other Person or is an officer, director or sole administrator of such other Person or in the case of a natural Person, his spouse, his or his spouse's children (including by adoption), his siblings (including half and step siblings), his estate and any trust entirely for the benefit of any one or more of himself or any of the foregoing individuals. 1.41. Series A Shares. "Series A Shares" shall mean the Class I and Class II authorized shares of Series A Common Stock, no par value, of G-Modelo. 1.42. Series B Shares. "Series B Shares" shall mean the 71,376,124 Class II shares of Series B Common Stock, no par value, of G-Modelo authorized for issuance upon conversion of shares of G-Modelo capital stock as provided in the Amended G-Modelo By-laws. 1.43. Series C Shares. "Series C Shares" shall mean the 40,646,995 authorized Class II shares of Series C NonVoting Stock, no par value, of G-Modelo. 1.44. Series P-C Shares. "Series P-C Shares" shall have the meaning set forth in the fourth preamble of this Agreement. 1.45. Subsidiary. The term "Subsidiary" when used in reference to any other Person shall mean (x) any corporation of which 50 percent or more of the outstand6

ing capital stock is owned, directly or indirectly, by such other Person, or (y) any corporation of which outstanding securities having ordinary voting power to elect a majority of the members of the Board of Directors of such corporation are owned, directly or indirectly, by such other Person, or (z) any Person or entity, directly or indirectly, controlling, controlled by or under common control with such other Person. 1.46. USA Export. "USA Export" shall mean Extrade, S.A. de C.V., a Mexican corporation formed by certain Controlling Shareholders prior to Closing as con- templated in Section 2.4(b)(ii). 1.47. U.S. GAAP. "U.S. GAAP" shall mean United States generally accepted accounting principles. 1.48. Other Definitional Provisions. Whenever the context so requires, each of the neuter, masculine or feminine forms of any pronoun shall include all such forms. When used in this Agreement, the phrase "to the Controlling Shareholders' best knowledge after due inqui- ry" shall mean the collective knowledge of all of the Controlling Shareholders after at least one of the Con- trolling Shareholders has made due inquiry of one or more employees or representatives of G-Modelo or a G-Modelo Corporation who has access to or knowledge of the information being sought. When used in this Agreement, the phrase "consolidated after-tax net earnings" of G-Modelo calculated in accordance with Mexican GAAP shall mean "utilidad neta consolidada." ARTICLE II TERMS OF THE SUBSCRIPTION OF SERIES P-C SHARES AND THE PURCHASE AND SALE OF INITIAL DIBLO COMMON SHARES

ing capital stock is owned, directly or indirectly, by such other Person, or (y) any corporation of which outstanding securities having ordinary voting power to elect a majority of the members of the Board of Directors of such corporation are owned, directly or indirectly, by such other Person, or (z) any Person or entity, directly or indirectly, controlling, controlled by or under common control with such other Person. 1.46. USA Export. "USA Export" shall mean Extrade, S.A. de C.V., a Mexican corporation formed by certain Controlling Shareholders prior to Closing as con- templated in Section 2.4(b)(ii). 1.47. U.S. GAAP. "U.S. GAAP" shall mean United States generally accepted accounting principles. 1.48. Other Definitional Provisions. Whenever the context so requires, each of the neuter, masculine or feminine forms of any pronoun shall include all such forms. When used in this Agreement, the phrase "to the Controlling Shareholders' best knowledge after due inqui- ry" shall mean the collective knowledge of all of the Controlling Shareholders after at least one of the Con- trolling Shareholders has made due inquiry of one or more employees or representatives of G-Modelo or a G-Modelo Corporation who has access to or knowledge of the information being sought. When used in this Agreement, the phrase "consolidated after-tax net earnings" of G-Modelo calculated in accordance with Mexican GAAP shall mean "utilidad neta consolidada." ARTICLE II TERMS OF THE SUBSCRIPTION OF SERIES P-C SHARES AND THE PURCHASE AND SALE OF INITIAL DIBLO COMMON SHARES 2.1. Subscription of Series P-C Shares and Purchase and Sale of the Initial Diblo Common Shares. Upon the terms and subject to the conditions of this Agreement, at the Closing (i) G-Modelo shall sell to the Investor, and the Investor shall subscribe and purchase from G-Modelo, the Series P-C Shares and (ii) the Trustee of the Banamex Trust shall sell to the Investor, and the Investor shall purchase from the Banamex Trust, the 7

Initial Diblo Shares (which shall be "ex" the previously declared dividend that is referred to in clause (iv) of paragraph (b) of Section 2.04). 2.2. The Closing. The Closing of the transac- tions contemplated by this Article II shall take place at the offices of G-Modelo, Campos Eliseos 400, 19th Floor, Colonia Lomas de Chapultepec, 11000 Mexico, D.F., commencing at 11:00 a.m. (Mexico time) on the date hereof provided that all of the conditions to the parties' obligations set forth in Articles VIII and IX have been satisfied or waived or such other place, time and date as the Controlling Shareholders and the Investor may mutual- ly agree upon. All matters at Closing shall be considered to take place simultaneously and no delivery of any document shall be deemed complete until all transactions and deliveries of documents are completed. 2.3. Purchase Price. The aggregate purchase price to be paid by the Investor for the Series P-C Shares (the "Series P-C Purchase Price") shall be 207.225 million United States dollars and the aggregate purchase price to be paid by the Investor for the Initial Diblo Shares (the "Diblo Purchase Price") shall be 270 million United States dollars. Payment of the Series P-C Pur- chase Price and the Diblo Purchase Price shall be made at the Closing by the Investor in immediately available United States funds. 2.4. Deliveries at the Closing. (a) Deliveries by the Investor. At the Closing, the Investor or A-B shall deliver or cause to be delivered the following: (i) the Series P-C Purchase Price to G-Modelo and the Diblo Purchase Price to the Banamex Trust;

Initial Diblo Shares (which shall be "ex" the previously declared dividend that is referred to in clause (iv) of paragraph (b) of Section 2.04). 2.2. The Closing. The Closing of the transac- tions contemplated by this Article II shall take place at the offices of G-Modelo, Campos Eliseos 400, 19th Floor, Colonia Lomas de Chapultepec, 11000 Mexico, D.F., commencing at 11:00 a.m. (Mexico time) on the date hereof provided that all of the conditions to the parties' obligations set forth in Articles VIII and IX have been satisfied or waived or such other place, time and date as the Controlling Shareholders and the Investor may mutual- ly agree upon. All matters at Closing shall be considered to take place simultaneously and no delivery of any document shall be deemed complete until all transactions and deliveries of documents are completed. 2.3. Purchase Price. The aggregate purchase price to be paid by the Investor for the Series P-C Shares (the "Series P-C Purchase Price") shall be 207.225 million United States dollars and the aggregate purchase price to be paid by the Investor for the Initial Diblo Shares (the "Diblo Purchase Price") shall be 270 million United States dollars. Payment of the Series P-C Pur- chase Price and the Diblo Purchase Price shall be made at the Closing by the Investor in immediately available United States funds. 2.4. Deliveries at the Closing. (a) Deliveries by the Investor. At the Closing, the Investor or A-B shall deliver or cause to be delivered the following: (i) the Series P-C Purchase Price to G-Modelo and the Diblo Purchase Price to the Banamex Trust; (ii) copies of a duly executed amendment to the Distribution Agreement dated as of the Closing Date between AB and Interna cionales (the "Internacionales Distribution Agreement"), providing, among other things, that, subject to the terms and conditions ther- eof, for so long as the Investor owns ten per- cent or more of the total outstanding shares of 8

G-Modelo capital stock, Internacionales shall continue to be the exclusive distributor of A-B beers in Mexico; (iii) the opinions referred to in Section 9.6; and (iv) any other documents, in- struments and writings required to be delivered by the Investor at or prior to the Closing pursuant to the terms of this Agreement. (b) Deliveries by the G-Modelo Signato- ries, the Banamex Trust and the Option Trust. At the Closing, the Controlling Shareholders, the Banamex Trust and the Option Trust shall deliver or cause to be deliv- ered the following: (i) stock certificates repre- senting the Series P-C Shares registered in the name of the Investor and the Initial Diblo Shares, duly endorsed in the name of the Inves- tor; (ii) a certificate of the appro- priate officer of Diblo certifying (A) the completion of the transfer to USA Export of the exclusive rights of Diblo for the export of G-Modelo beers to the United States upon the terms set forth in the agreement between USA Export and the applicable G-Modelo Corporations (the "USA Export Agreement"),(B) the Certif- icate of Incorporation and By-laws of USA Ex- port and (C) the USA Export Agreement as in effect on the Closing Date duly executed by the parties thereto; (iii) a certificate of an appro- priate officer of G-Modelo certifying (x) the exact amount of the dividend declared out of the consolidated after-tax net earnings of G- Modelo calculated in accordance with Mexican GAAP, which dividend will be 484,440,235.90 Mexican Pesos which is the Mexican Peso equiva- lent of 155.4 million United States dollars based upon an agreed Free Exchange Rate of 3.1170 Mexican Pesos per United States dollar

G-Modelo capital stock, Internacionales shall continue to be the exclusive distributor of A-B beers in Mexico; (iii) the opinions referred to in Section 9.6; and (iv) any other documents, in- struments and writings required to be delivered by the Investor at or prior to the Closing pursuant to the terms of this Agreement. (b) Deliveries by the G-Modelo Signato- ries, the Banamex Trust and the Option Trust. At the Closing, the Controlling Shareholders, the Banamex Trust and the Option Trust shall deliver or cause to be deliv- ered the following: (i) stock certificates repre- senting the Series P-C Shares registered in the name of the Investor and the Initial Diblo Shares, duly endorsed in the name of the Inves- tor; (ii) a certificate of the appro- priate officer of Diblo certifying (A) the completion of the transfer to USA Export of the exclusive rights of Diblo for the export of G-Modelo beers to the United States upon the terms set forth in the agreement between USA Export and the applicable G-Modelo Corporations (the "USA Export Agreement"),(B) the Certif- icate of Incorporation and By-laws of USA Ex- port and (C) the USA Export Agreement as in effect on the Closing Date duly executed by the parties thereto; (iii) a certificate of an appro- priate officer of G-Modelo certifying (x) the exact amount of the dividend declared out of the consolidated after-tax net earnings of G- Modelo calculated in accordance with Mexican GAAP, which dividend will be 484,440,235.90 Mexican Pesos which is the Mexican Peso equiva- lent of 155.4 million United States dollars based upon an agreed Free Exchange Rate of 3.1170 Mexican Pesos per United States dollar 9

for this purpose, (y) the date of declaration of such dividend and (z) the date of payment of such dividend (which shall be payable to G-Mod- elo's shareholders of record on the date of such declaration); (iv) a certificate of an appro- priate officer of Diblo certifying (x) the exact amount of the dividend declared out of the consolidated after-tax net earnings of Diblo calculated in accordance with Mexican GAAP, which dividend will be 645,920,325 Mexi- can Pesos based upon an agreed Free Exchange Rate of 3.1170 Mexican Pesos per United States dollar for this purpose, (y) the date of dec- laration of such dividend, and (z) the date of payment of such dividend (which shall be pay- able to Diblo's shareholders of record on the date of such declaration); (v) a copy of the Amended G-Mo- delo By-laws as in effect on the Closing Date certified by the Secretary of GModelo and the Amended Diblo By-laws as in effect on the Clos- ing Date certified by the Secretary of Diblo; (vi) Powers of Attorney granting one or more of the Controlling Shareholders the power and authority to act on behalf of those Controlling Shareholders who have executed this Agreement by power of attorney, which Control- ling Shareholders together with the Controlling Shareholders who have directly executed this Agreement own or control at least 99 percent of the capital stock of G-Modelo; (vii) the opinion referred to in Section 8.6; (viii) copies of the duly executed Control Trust Agreement, the Banamex Trust Agreement, the Option Trust Agreement and the Real Estate Trust Agreement, in each case as in effect on the Closing Date; (ix) Designation as Trustee Delegate authorizing the representative of 10

for this purpose, (y) the date of declaration of such dividend and (z) the date of payment of such dividend (which shall be payable to G-Mod- elo's shareholders of record on the date of such declaration); (iv) a certificate of an appro- priate officer of Diblo certifying (x) the exact amount of the dividend declared out of the consolidated after-tax net earnings of Diblo calculated in accordance with Mexican GAAP, which dividend will be 645,920,325 Mexi- can Pesos based upon an agreed Free Exchange Rate of 3.1170 Mexican Pesos per United States dollar for this purpose, (y) the date of dec- laration of such dividend, and (z) the date of payment of such dividend (which shall be pay- able to Diblo's shareholders of record on the date of such declaration); (v) a copy of the Amended G-Mo- delo By-laws as in effect on the Closing Date certified by the Secretary of GModelo and the Amended Diblo By-laws as in effect on the Clos- ing Date certified by the Secretary of Diblo; (vi) Powers of Attorney granting one or more of the Controlling Shareholders the power and authority to act on behalf of those Controlling Shareholders who have executed this Agreement by power of attorney, which Control- ling Shareholders together with the Controlling Shareholders who have directly executed this Agreement own or control at least 99 percent of the capital stock of G-Modelo; (vii) the opinion referred to in Section 8.6; (viii) copies of the duly executed Control Trust Agreement, the Banamex Trust Agreement, the Option Trust Agreement and the Real Estate Trust Agreement, in each case as in effect on the Closing Date; (ix) Designation as Trustee Delegate authorizing the representative of 10

Banco Nacional de Mexico, S.A. on behalf of each of the Banamex Trust and the Option Trust to execute the Banamex Trust Agreement and the Option Trust Agreement, respectively, and this Agreement and of the Control Trust to execute the Control Trust Agreement; and (x) any other documents, in- struments and writings required to be delivered by the G-Modelo Signatories, the Banamex Trust or the Option Trust at or prior to the Closing pursuant to the terms of this Agreement. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE G-MODELO SIGNATORIES Each of the G-Modelo Signatories, jointly and severally, represents and warrants to A-B, A-BI and the Investor as follows: 3.1. Capital Stock of G-Modelo. (a) Other than as set forth on Exhibit A, there are no authorized, issued or outstanding securities of G-Modelo. The Series A Shares and the Series C Shares are owned of record as set forth on Exhibit A, free and clear of all Encumbrances, except as set forth in this Agreement. All of the Series A Shares and the Series C Shares have been duly and validly authorized and issued, and all of such shares, other than those Series C Shares held in GModelo's treasury for issuance to the public in accordance with Section 5.8 or to executive employees of the GModelo Corporations in accordance with Section 5.13, are fully paid and nonassessable, and, upon payment for the treasury shares in connection with such issuanc- es, such treasury shares will be outstanding, fully paid and nonassessable. The Series B Shares have been duly and validly authorized for issuance upon conversion of shares of G-Modelo capital stock pursuant to the Amended G-Modelo By-laws, are free of pre-emptive rights and none of such shares have been issued. The Series P-C Shares have been duly and validly authorized and, upon payment therefor as provided in this Agreement, will be validly issued and outstanding, fully paid and nonassessable.

Banco Nacional de Mexico, S.A. on behalf of each of the Banamex Trust and the Option Trust to execute the Banamex Trust Agreement and the Option Trust Agreement, respectively, and this Agreement and of the Control Trust to execute the Control Trust Agreement; and (x) any other documents, in- struments and writings required to be delivered by the G-Modelo Signatories, the Banamex Trust or the Option Trust at or prior to the Closing pursuant to the terms of this Agreement. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE G-MODELO SIGNATORIES Each of the G-Modelo Signatories, jointly and severally, represents and warrants to A-B, A-BI and the Investor as follows: 3.1. Capital Stock of G-Modelo. (a) Other than as set forth on Exhibit A, there are no authorized, issued or outstanding securities of G-Modelo. The Series A Shares and the Series C Shares are owned of record as set forth on Exhibit A, free and clear of all Encumbrances, except as set forth in this Agreement. All of the Series A Shares and the Series C Shares have been duly and validly authorized and issued, and all of such shares, other than those Series C Shares held in GModelo's treasury for issuance to the public in accordance with Section 5.8 or to executive employees of the GModelo Corporations in accordance with Section 5.13, are fully paid and nonassessable, and, upon payment for the treasury shares in connection with such issuanc- es, such treasury shares will be outstanding, fully paid and nonassessable. The Series B Shares have been duly and validly authorized for issuance upon conversion of shares of G-Modelo capital stock pursuant to the Amended G-Modelo By-laws, are free of pre-emptive rights and none of such shares have been issued. The Series P-C Shares have been duly and validly authorized and, upon payment therefor as provided in this Agreement, will be validly issued and outstanding, fully paid and nonassessable. 11

Except as provided in this Agreement, the Control Trust Agreement and the Option Trust Agreement, there is no subscription, option, warrant, call, right, contract, agreement, commitment, understanding or arrangement with respect to the issuance, sale, delivery or transfer of the capital stock of G-Modelo, including any right of conversion or exchange under any security or other in- strument. Each of the persons listed on Exhibit A has good and marketable title to the shares listed next to such person's name on Exhibit A, and the Investor will receive good and marketable title to the Series P-C Shares, free and clear of all Encumbrances, except as set forth in this Agreement. (b) Upon the conversion, if any, by the Investor of the Series P-C Shares into Series B Shares pursuant to the terms of the Series P-C Shares, the Investor will receive good and marketable title to the Series B Shares free and clear of all Encumbrances, except as set forth in this Agreement. (c) Upon the purchase of the Option Shares at the Option Closing (as such term is defined in Section 6.3) pursuant to Section 6.3, the Investor or its authorized designee, if any, will receive good and marketable title to the Option Shares free and clear of all Encumbrances, except as set forth in this Agreement. (d) Upon the purchase of Series A Shares at a Purchase Right Closing (as such term is defined in Section 6.2) pursuant to Section 6.2, the Investor or its authorized designee, if any, will receive good and marketable title to such Series A Shares free and clear of all Encumbrances, except as set forth in this Agreement. (e) Except as provided in this Agreement, the Control Trust Agreement and the Amended G-Modelo By- laws, the Control Trust is not a party to any subscrip- tion, option, warrant, call, right, contract, agreement, commitment, understanding or arrangement with respect to the sale, delivery or transfer of the Series A Shares held by the Control Trust, including any right of conver- sion or exchange under any security or other instrument. Except as provided in this Agreement, the Option Trust Agreement and the Amended G-Modelo By-laws, the

Except as provided in this Agreement, the Control Trust Agreement and the Option Trust Agreement, there is no subscription, option, warrant, call, right, contract, agreement, commitment, understanding or arrangement with respect to the issuance, sale, delivery or transfer of the capital stock of G-Modelo, including any right of conversion or exchange under any security or other in- strument. Each of the persons listed on Exhibit A has good and marketable title to the shares listed next to such person's name on Exhibit A, and the Investor will receive good and marketable title to the Series P-C Shares, free and clear of all Encumbrances, except as set forth in this Agreement. (b) Upon the conversion, if any, by the Investor of the Series P-C Shares into Series B Shares pursuant to the terms of the Series P-C Shares, the Investor will receive good and marketable title to the Series B Shares free and clear of all Encumbrances, except as set forth in this Agreement. (c) Upon the purchase of the Option Shares at the Option Closing (as such term is defined in Section 6.3) pursuant to Section 6.3, the Investor or its authorized designee, if any, will receive good and marketable title to the Option Shares free and clear of all Encumbrances, except as set forth in this Agreement. (d) Upon the purchase of Series A Shares at a Purchase Right Closing (as such term is defined in Section 6.2) pursuant to Section 6.2, the Investor or its authorized designee, if any, will receive good and marketable title to such Series A Shares free and clear of all Encumbrances, except as set forth in this Agreement. (e) Except as provided in this Agreement, the Control Trust Agreement and the Amended G-Modelo By- laws, the Control Trust is not a party to any subscrip- tion, option, warrant, call, right, contract, agreement, commitment, understanding or arrangement with respect to the sale, delivery or transfer of the Series A Shares held by the Control Trust, including any right of conver- sion or exchange under any security or other instrument. Except as provided in this Agreement, the Option Trust Agreement and the Amended G-Modelo By-laws, the Option Trust is not a party to any subscription, option, war- rant, call, right, contract, agreement, commitment, 12

understanding or arrangement with respect to the sale, delivery or transfer of the Series A Shares held by the Option Trust, including any right of conversion or ex- change under any security or other instrument. Each of the Control Trust and the Option Trust has good and mar- ketable title to the Series A Shares held in trust by it, free and clear of all Encumbrances, except as set forth in this Agreement. 3.2. Capital Stock of Diblo and the G-Modelo Corporations. (a) The authorized capital stock of Diblo is variable with a minimum fixed capital of 1,428,804,614.20 Mexican Pesos and a variable capital, which as of the Closing Date, equals 1,122,188,515.70 Mexican Pesos. The total capital is divided into (i) 226,268,273 shares of Diblo common stock, all of which shares are issued and outstanding, 169,701,206 of which shares are designated as Class I Diblo Series A Shares which represent the minimum fixed capital and 56,567,067 of which shares are designated as Class II Diblo Series B Shares and (ii) 17,030,940 Diblo P-C Shares, all of which shares are issued and outstanding and are designated as Class II shares and which together with the Class II Diblo Series B Shares represent the variable capital. The Diblo Series A Shares and the Diblo Series B Shares (collectively, the "Diblo Common Shares") and the Diblo P-C shares are owned of record as set forth on Schedule 3.2(a). All Diblo Common Shares have been duly and validly authorized and issued, are fully paid and nonassessable, and are owned of record as set forth on Schedule 3.2(a) free and clear of all Encumbrances, except as set forth in this Agree- ment. All Diblo P-C Shares have been duly and validly authorized and issued, and upon payment therefor immedi- ately after the Closing will be fully paid and nonassess- able, and are owned by G-Modelo free and clear of Encum- brances. Other than the Diblo Common Shares and the Diblo P-C Shares, there are no authorized, issued or out- standing securities of Diblo. Except as provided in this Agreement and the Banamex Trust Agreement, there is no subscription, option, warrant, call, right, contract, agreement, commitment, understanding or arrangement with respect to the issuance, sale, delivery or transfer of the capital stock of Diblo, including any right of con- version or exchange under any security or other instru- ment. Each of G-Modelo and the Banamex Trust has good

understanding or arrangement with respect to the sale, delivery or transfer of the Series A Shares held by the Option Trust, including any right of conversion or ex- change under any security or other instrument. Each of the Control Trust and the Option Trust has good and mar- ketable title to the Series A Shares held in trust by it, free and clear of all Encumbrances, except as set forth in this Agreement. 3.2. Capital Stock of Diblo and the G-Modelo Corporations. (a) The authorized capital stock of Diblo is variable with a minimum fixed capital of 1,428,804,614.20 Mexican Pesos and a variable capital, which as of the Closing Date, equals 1,122,188,515.70 Mexican Pesos. The total capital is divided into (i) 226,268,273 shares of Diblo common stock, all of which shares are issued and outstanding, 169,701,206 of which shares are designated as Class I Diblo Series A Shares which represent the minimum fixed capital and 56,567,067 of which shares are designated as Class II Diblo Series B Shares and (ii) 17,030,940 Diblo P-C Shares, all of which shares are issued and outstanding and are designated as Class II shares and which together with the Class II Diblo Series B Shares represent the variable capital. The Diblo Series A Shares and the Diblo Series B Shares (collectively, the "Diblo Common Shares") and the Diblo P-C shares are owned of record as set forth on Schedule 3.2(a). All Diblo Common Shares have been duly and validly authorized and issued, are fully paid and nonassessable, and are owned of record as set forth on Schedule 3.2(a) free and clear of all Encumbrances, except as set forth in this Agree- ment. All Diblo P-C Shares have been duly and validly authorized and issued, and upon payment therefor immedi- ately after the Closing will be fully paid and nonassess- able, and are owned by G-Modelo free and clear of Encum- brances. Other than the Diblo Common Shares and the Diblo P-C Shares, there are no authorized, issued or out- standing securities of Diblo. Except as provided in this Agreement and the Banamex Trust Agreement, there is no subscription, option, warrant, call, right, contract, agreement, commitment, understanding or arrangement with respect to the issuance, sale, delivery or transfer of the capital stock of Diblo, including any right of con- version or exchange under any security or other instru- ment. Each of G-Modelo and the Banamex Trust has good 13

and marketable title to the Diblo Common Shares and, in the case of G-Modelo, the Diblo P-C Shares owned by it, and at the Closing the Investor will receive good and marketable title to the Initial Diblo Shares, free and clear of all Encumbrances, except as set forth in this Agreement. (b) Upon the purchase of the Diblo Option Shares at the Diblo Option Closing (as such terms are defined in Section 6.4) pursuant to Section 6.4, the Investor or its authorized designee, if any, will receive good and marketable title to the Diblo Option Shares free and clear of all Encumbrances, except as set forth in this Agreement. (c) For each of the G-Modelo Corpora- tions, Schedule 3.2(c) identifies (i) the names of the directors or sole administrator, as the case may be, (ii) the authorized capital for such corporation, divided between minimum fixed capital and variable capital, (iii) the number of such shares which are issued and outstand- ing, together with the number of treasury shares, if any, and (iv) the names of all record holders of such issued and outstanding shares (indicating the number of shares owned). Each of the G-Modelo Corporations has good and marketable title to the shares of capital stock of the G- Modelo Corporations owned by it, free and clear of all Encumbrances. All of the shares of capital stock of the G-Modelo Corporations are duly and validly authorized and issued, fully paid and nonassessable. Except as provided in this Agreement, there is no subscription, option, war- rant, call, right, contract, agreement, commitment, understanding or arrangement with respect to the issu- ance, sale, delivery or transfer of any of the shares of the capital stock of the G-Modelo Corporations, including any right of conversion or exchange under any security or other instrument. As promptly as practicable, the Con- trolling Shareholders agree to identify the relationship, if any, of the shareholdrs, the directors or the sole administrator of the GModelo Corporations identified on Schedule 3.2(c) to Srs. Antonino Fernandez R., Pablo Aramburuzabala, Nemesio Diez R., Juan Sanchez-Navarro y P. or Valentin Diez M. and to provide such information to A-B. (d) Except as provided in this Agreement and the Banamex Trust Agreement, the Banamex Trust is not 14

and marketable title to the Diblo Common Shares and, in the case of G-Modelo, the Diblo P-C Shares owned by it, and at the Closing the Investor will receive good and marketable title to the Initial Diblo Shares, free and clear of all Encumbrances, except as set forth in this Agreement. (b) Upon the purchase of the Diblo Option Shares at the Diblo Option Closing (as such terms are defined in Section 6.4) pursuant to Section 6.4, the Investor or its authorized designee, if any, will receive good and marketable title to the Diblo Option Shares free and clear of all Encumbrances, except as set forth in this Agreement. (c) For each of the G-Modelo Corpora- tions, Schedule 3.2(c) identifies (i) the names of the directors or sole administrator, as the case may be, (ii) the authorized capital for such corporation, divided between minimum fixed capital and variable capital, (iii) the number of such shares which are issued and outstand- ing, together with the number of treasury shares, if any, and (iv) the names of all record holders of such issued and outstanding shares (indicating the number of shares owned). Each of the G-Modelo Corporations has good and marketable title to the shares of capital stock of the G- Modelo Corporations owned by it, free and clear of all Encumbrances. All of the shares of capital stock of the G-Modelo Corporations are duly and validly authorized and issued, fully paid and nonassessable. Except as provided in this Agreement, there is no subscription, option, war- rant, call, right, contract, agreement, commitment, understanding or arrangement with respect to the issu- ance, sale, delivery or transfer of any of the shares of the capital stock of the G-Modelo Corporations, including any right of conversion or exchange under any security or other instrument. As promptly as practicable, the Con- trolling Shareholders agree to identify the relationship, if any, of the shareholdrs, the directors or the sole administrator of the GModelo Corporations identified on Schedule 3.2(c) to Srs. Antonino Fernandez R., Pablo Aramburuzabala, Nemesio Diez R., Juan Sanchez-Navarro y P. or Valentin Diez M. and to provide such information to A-B. (d) Except as provided in this Agreement and the Banamex Trust Agreement, the Banamex Trust is not 14

a party to any subscription, option, warrant, call, right, contract, agreement, commitment, understanding or arrangement with respect to the sale, delivery or trans- fer of the Diblo Series B Shares held by the Banamex Trust, including any right of conversion or exchange under any security or other instrument. The Banamex Trust has good and marketable title to the Diblo Series B Shares held in trust by it, free and clear of all Encumbrances, except as set forth in this Agreement. 3.3. USA Export. All of the shares of capital stock of USA Export are duly and validly authorized and issued, fully paid and nonassessable and owned of record and beneficially by certain of the Controlling Sharehold- ers. Except as provided in this Agreement, there is no subscription, option, warrant, call, right, contract, agreement, commitment, understanding or arrangement with respect to the issuance, sale, delivery or transfer of the capital stock of USA Export, including any right of conversion or exchange under any security or other in- strument. All of the exclusive rights of Diblo for the export of G-Modelo beers to the United States have been transferred to USA Export. USA Export had all requisite power and authority (corporate or otherwise) to execute, deliver and perform the USA Export Agreement and to consummate the transactions contemplated thereby. The execution, delivery and performance of the USA Export Agreement by USA Export and the consummation by USA Export of its obligations thereunder have been duly authorized by all necessary corporate action and no other corporate proceedings on the part of the Board of Direc- tors or shareholders of USA Export is necessary to autho- rize the USA Export Agreement or to consummate the trans- action contemplated thereby. The USA Export Agreement has been duly and validly executed and delivered by the G-Modelo Corporations which are parties thereto and USA Export and constitutes the valid and binding obligation of each of them, enforceable against each of them in accordance with its terms. None of A-B, A-BI, the Inves- tor or any of their respective affiliates has any owner- ship interest in USA Export or ability to influence or control any of the policies or decisions of the Board of Directors or management of USA Export. 15 3.4. Power and Authority; Effect of Agreement. (a) Each of the G-Modelo Signatories has all requisite power and authority (corporate or other- wise) to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. The execution,

a party to any subscription, option, warrant, call, right, contract, agreement, commitment, understanding or arrangement with respect to the sale, delivery or trans- fer of the Diblo Series B Shares held by the Banamex Trust, including any right of conversion or exchange under any security or other instrument. The Banamex Trust has good and marketable title to the Diblo Series B Shares held in trust by it, free and clear of all Encumbrances, except as set forth in this Agreement. 3.3. USA Export. All of the shares of capital stock of USA Export are duly and validly authorized and issued, fully paid and nonassessable and owned of record and beneficially by certain of the Controlling Sharehold- ers. Except as provided in this Agreement, there is no subscription, option, warrant, call, right, contract, agreement, commitment, understanding or arrangement with respect to the issuance, sale, delivery or transfer of the capital stock of USA Export, including any right of conversion or exchange under any security or other in- strument. All of the exclusive rights of Diblo for the export of G-Modelo beers to the United States have been transferred to USA Export. USA Export had all requisite power and authority (corporate or otherwise) to execute, deliver and perform the USA Export Agreement and to consummate the transactions contemplated thereby. The execution, delivery and performance of the USA Export Agreement by USA Export and the consummation by USA Export of its obligations thereunder have been duly authorized by all necessary corporate action and no other corporate proceedings on the part of the Board of Direc- tors or shareholders of USA Export is necessary to autho- rize the USA Export Agreement or to consummate the trans- action contemplated thereby. The USA Export Agreement has been duly and validly executed and delivered by the G-Modelo Corporations which are parties thereto and USA Export and constitutes the valid and binding obligation of each of them, enforceable against each of them in accordance with its terms. None of A-B, A-BI, the Inves- tor or any of their respective affiliates has any owner- ship interest in USA Export or ability to influence or control any of the policies or decisions of the Board of Directors or management of USA Export. 15 3.4. Power and Authority; Effect of Agreement. (a) Each of the G-Modelo Signatories has all requisite power and authority (corporate or other- wise) to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by the corporate G-Modelo Signatories of their obligations under this Agreement and the consummation by them of the transac- tions contemplated hereby have been duly authorized by the Board of Directors and shareholders, as applicable, of each corporate G-Modelo Signatory, and no other corpo- rate action or proceeding on the part of such corporation or its shareholders is necessary to authorize this Agreement or the consummation of any of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the G-Modelo Signato- ries and constitutes the valid and binding obligation of each of the G-Modelo Signatories, enforceable against each of them in accordance with its terms. (b) One or more of the Controlling Share- holders has full legal power and authority to act on behalf of those Controlling Shareholders who have exe- cuted this Agreement by power of attorney, which Control- ling Shareholders together with the Controlling Share- holders who have directly executed this Agreement own or control at least 99 percent of the capital stock of G- Modelo. (c) As of the date hereof, a majority of the members of the technical committees of the Control Trust, the Banamex Trust and the Option Trust are Con- trolling Shareholders or will otherwise be bound by the terms of this Agreement. (d) The execution, delivery and perfor- mance by the G-Modelo Signatories of this Agreement and the consummation by the G-Modelo Signatories of the transactions contemplated hereby does not and will not, with or without the giving of notice or the lapse of time, or both, (i) violate any law, rule or regulation to which any GModelo Signatory or any of its respective assets is subject, (ii) violate any order, writ, injunc- tion, judgment or decree applicable to any G-Modelo Signatory or any of its respective assets or properties, or (iii) conflict with, or result in a breach of or 16

default under, or give rise to any right of termination, cancellation or acceleration under (A) any term or condition of the Certificate of Incorporation, the By-Laws, or other similar charter documents, of any corporate G-

3.4. Power and Authority; Effect of Agreement. (a) Each of the G-Modelo Signatories has all requisite power and authority (corporate or other- wise) to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by the corporate G-Modelo Signatories of their obligations under this Agreement and the consummation by them of the transac- tions contemplated hereby have been duly authorized by the Board of Directors and shareholders, as applicable, of each corporate G-Modelo Signatory, and no other corpo- rate action or proceeding on the part of such corporation or its shareholders is necessary to authorize this Agreement or the consummation of any of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the G-Modelo Signato- ries and constitutes the valid and binding obligation of each of the G-Modelo Signatories, enforceable against each of them in accordance with its terms. (b) One or more of the Controlling Share- holders has full legal power and authority to act on behalf of those Controlling Shareholders who have exe- cuted this Agreement by power of attorney, which Control- ling Shareholders together with the Controlling Share- holders who have directly executed this Agreement own or control at least 99 percent of the capital stock of G- Modelo. (c) As of the date hereof, a majority of the members of the technical committees of the Control Trust, the Banamex Trust and the Option Trust are Con- trolling Shareholders or will otherwise be bound by the terms of this Agreement. (d) The execution, delivery and perfor- mance by the G-Modelo Signatories of this Agreement and the consummation by the G-Modelo Signatories of the transactions contemplated hereby does not and will not, with or without the giving of notice or the lapse of time, or both, (i) violate any law, rule or regulation to which any GModelo Signatory or any of its respective assets is subject, (ii) violate any order, writ, injunc- tion, judgment or decree applicable to any G-Modelo Signatory or any of its respective assets or properties, or (iii) conflict with, or result in a breach of or 16

default under, or give rise to any right of termination, cancellation or acceleration under (A) any term or condition of the Certificate of Incorporation, the By-Laws, or other similar charter documents, of any corporate GMode- lo Signatory, or (B) any of the terms, conditions or provisions of any note, bond, mortgage, indenture or material lease, license, agreement or other material instrument to which any G-Modelo Signatory is a party or by which any of them or any of their respective assets may be bound; except with respect to clauses (i), (ii) and (iii) (B) above, for violations, conflicts, breaches or defaults which in the aggregate would not materially hinder or impair any G-Modelo Signatory's ability to consummate the transactions contemplated hereby. 3.5. Investments. The corporations, partner- ships, joint ventures or other entities in which G-Modelo or any of the G-Modelo Corporations has, or pursuant to any agreement will have, individually or in the aggre- gate, directly or indirectly, the right to acquire by any means, an equity interest or investment exceeding ten percent of the equity capital thereof (other than the G-Modelo Corporations) (the "G-Modelo Investments"), in the aggregate, are not material to the business, assets, operations, prospects or financial condition of G-Modelo and the G-Modelo Corporations, taken as a whole. 3.6. Organization; Assets. (a) Each of G-Modelo, the G-Modelo Corpo- rations and USA Export is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and each has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. G-Modelo, the G-Modelo Corporations and USA Export are each duly qualified or licensed and in good standing to do business in each jurisdiction in which the property owned, leased or operated by such corporation or the nature of the business conducted by such corporation makes such qualification necessary, except where the failure to be so qualified or licensed and in good standing would not have a material adverse effect on the business, assets, operations, prospects or financial condition of G-Modelo, such G-Modelo Corpora- tion or USA Export, as the case may be. The Controlling Shareholders have heretofore delivered to the Investor 17

default under, or give rise to any right of termination, cancellation or acceleration under (A) any term or condition of the Certificate of Incorporation, the By-Laws, or other similar charter documents, of any corporate GMode- lo Signatory, or (B) any of the terms, conditions or provisions of any note, bond, mortgage, indenture or material lease, license, agreement or other material instrument to which any G-Modelo Signatory is a party or by which any of them or any of their respective assets may be bound; except with respect to clauses (i), (ii) and (iii) (B) above, for violations, conflicts, breaches or defaults which in the aggregate would not materially hinder or impair any G-Modelo Signatory's ability to consummate the transactions contemplated hereby. 3.5. Investments. The corporations, partner- ships, joint ventures or other entities in which G-Modelo or any of the G-Modelo Corporations has, or pursuant to any agreement will have, individually or in the aggre- gate, directly or indirectly, the right to acquire by any means, an equity interest or investment exceeding ten percent of the equity capital thereof (other than the G-Modelo Corporations) (the "G-Modelo Investments"), in the aggregate, are not material to the business, assets, operations, prospects or financial condition of G-Modelo and the G-Modelo Corporations, taken as a whole. 3.6. Organization; Assets. (a) Each of G-Modelo, the G-Modelo Corpo- rations and USA Export is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and each has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. G-Modelo, the G-Modelo Corporations and USA Export are each duly qualified or licensed and in good standing to do business in each jurisdiction in which the property owned, leased or operated by such corporation or the nature of the business conducted by such corporation makes such qualification necessary, except where the failure to be so qualified or licensed and in good standing would not have a material adverse effect on the business, assets, operations, prospects or financial condition of G-Modelo, such G-Modelo Corpora- tion or USA Export, as the case may be. The Controlling Shareholders have heretofore delivered to the Investor 17

complete and correct copies of the Certificate of Incor- poration and Amended By-laws (or other similar charter documents), as currently in effect, of G-Modelo and Diblo. The Controlling Shareholders have heretofore made available to the Investor complete and correct copies of (i) the stock registry book and (ii) the Certificate of Incorporation and By-laws (or other similar charter documents), as currently in effect, of each G-Modelo Corporation (other than Seeger Industrial, Eurocermex, Iberocermex, Procermex, Inc., a Texas corporation ("Proc- ermex"), Desarrollo Inmobiliario Siglo XXI, S.A. de C.V. and Arena Silica de Mexico, S.A. de C.V.). Each of the Amended G-Modelo By-laws and the Amended Diblo By-laws has been duly and validly authorized, is in full force and effect and is enforceable in accordance with its terms. (b) The assets currently owned by or leased to G-Modelo and the G-Modelo Corporations, direct- ly or indirectly, include all of the assets and proper- ties, whether tangible or intangible, real, personal or mixed, used in connection with, or that relate to or are necessary for G-Modelo and the G-Modelo Corporations to conduct their business and operations in all material re- spects as presently conducted. The assets reflected on the GModelo Balance Sheet or acquired by G-Modelo or a G-Modelo Corporation after the date of the G-Modelo Balance Sheet are in all material respects in good work- ing condition for the conduct of the business and operations of G-Modelo and the G-Modelo Corporations, ordinary wear and tear excepted. (c) As of the Closing Date, (i) the only assets of G-Modelo are 169,701,202 Diblo Series A Shares, 17,030,940 Diblo PC Shares, cash and marketable securi- ties; (ii) G-Modelo has no liabilities other than liabil- ities incurred in connection with the transactions con- templated by this Agreement; and (iii) G-Modelo conducts no business or operations except in connection with the transactions contemplated by this Agreement and except for investing activities with respect to the cash and marketable securities owned by it. 3.7. Financial Information. The Controlling Shareholders have previously furnished to the Investor: (a) audited consolidated balance sheets and the related audited consolidated statements of income, changes in

complete and correct copies of the Certificate of Incor- poration and Amended By-laws (or other similar charter documents), as currently in effect, of G-Modelo and Diblo. The Controlling Shareholders have heretofore made available to the Investor complete and correct copies of (i) the stock registry book and (ii) the Certificate of Incorporation and By-laws (or other similar charter documents), as currently in effect, of each G-Modelo Corporation (other than Seeger Industrial, Eurocermex, Iberocermex, Procermex, Inc., a Texas corporation ("Proc- ermex"), Desarrollo Inmobiliario Siglo XXI, S.A. de C.V. and Arena Silica de Mexico, S.A. de C.V.). Each of the Amended G-Modelo By-laws and the Amended Diblo By-laws has been duly and validly authorized, is in full force and effect and is enforceable in accordance with its terms. (b) The assets currently owned by or leased to G-Modelo and the G-Modelo Corporations, direct- ly or indirectly, include all of the assets and proper- ties, whether tangible or intangible, real, personal or mixed, used in connection with, or that relate to or are necessary for G-Modelo and the G-Modelo Corporations to conduct their business and operations in all material re- spects as presently conducted. The assets reflected on the GModelo Balance Sheet or acquired by G-Modelo or a G-Modelo Corporation after the date of the G-Modelo Balance Sheet are in all material respects in good work- ing condition for the conduct of the business and operations of G-Modelo and the G-Modelo Corporations, ordinary wear and tear excepted. (c) As of the Closing Date, (i) the only assets of G-Modelo are 169,701,202 Diblo Series A Shares, 17,030,940 Diblo PC Shares, cash and marketable securi- ties; (ii) G-Modelo has no liabilities other than liabil- ities incurred in connection with the transactions con- templated by this Agreement; and (iii) G-Modelo conducts no business or operations except in connection with the transactions contemplated by this Agreement and except for investing activities with respect to the cash and marketable securities owned by it. 3.7. Financial Information. The Controlling Shareholders have previously furnished to the Investor: (a) audited consolidated balance sheets and the related audited consolidated statements of income, changes in 18

stockholders equity and changes in the financial position (including the related notes) of G-Modelo and subsidiaries for the fiscal years ended December 31, 1992 and December 31, 1991 and of the G-Modelo Corporations for each of the four fiscal years ended December 31, 1991, December 31, 1990, December 31, 1989 and December 31, 1988 accompanied by the auditor reports thereon (collec- tively, the "Audited Consolidated Financial Statements"), and (b) the unaudited consolidated balance sheet and the related unaudited consolidated statements of income of G-Modelo and subsidiaries for the two months ended Febru- ary 28, 1993 (collectively, the "Unaudited Consolidated Financial Statements" and together with the Audited Consolidated Financial Statements, the "Consolidated Financial Statements"). The audited consolidated balance sheet of G-Modelo and subsidiaries for the fiscal year ended December 31, 1992 is hereinafter referred to as the "G-Modelo Balance Sheet." The Consolidated Financial Statements (i) were prepared from the (A) books and records of G-Modelo and the G-Modelo Corporations in the case of the Audited Consolidated Financial Statements for the fiscal year ended December 31, 1992 and the Unaudited Consolidated Financial Statements and (B) from the books and records of the G-Modelo Corporations in the case of the Audited Consolidated Financial Statements for other four fiscal years, which books and records accurately reflect in all material respects the accounts and transactions recorded therein, (ii) present fairly the finan- cial position, results of operations, changes in stock- holders equity and changes in financial position of G-Modelo and its subsidiaries as of and for the periods in which they relate, and (iii) have been prepared in accordance with Mexican GAAP consistently applied throug- hout the periods covered, except as otherwise noted therein and except that the Unaudited Consolidated Finan- cial Statements are subject to any normal and recurring adjustments which may arise from the audit of the fiscal year ended December 31, 1993. The consolidated books and records of G-Modelo and its subsidiaries reflect that as of December 31, 1992, G-Modelo and the G-Modelo Corpora- tions had cufine (Cuenta De Utilidad Fiscal Neta) in an aggregate amount equal to 2,216,147,495 Mexican Pesos. 3.8. Undisclosed Liabilities; Absence of Certain Changes. Neither G-Modelo nor any G-Modelo Corporation has any liabilities or obligations of any nature, secured or unsecured (absolute, accrued, contin19

stockholders equity and changes in the financial position (including the related notes) of G-Modelo and subsidiaries for the fiscal years ended December 31, 1992 and December 31, 1991 and of the G-Modelo Corporations for each of the four fiscal years ended December 31, 1991, December 31, 1990, December 31, 1989 and December 31, 1988 accompanied by the auditor reports thereon (collec- tively, the "Audited Consolidated Financial Statements"), and (b) the unaudited consolidated balance sheet and the related unaudited consolidated statements of income of G-Modelo and subsidiaries for the two months ended Febru- ary 28, 1993 (collectively, the "Unaudited Consolidated Financial Statements" and together with the Audited Consolidated Financial Statements, the "Consolidated Financial Statements"). The audited consolidated balance sheet of G-Modelo and subsidiaries for the fiscal year ended December 31, 1992 is hereinafter referred to as the "G-Modelo Balance Sheet." The Consolidated Financial Statements (i) were prepared from the (A) books and records of G-Modelo and the G-Modelo Corporations in the case of the Audited Consolidated Financial Statements for the fiscal year ended December 31, 1992 and the Unaudited Consolidated Financial Statements and (B) from the books and records of the G-Modelo Corporations in the case of the Audited Consolidated Financial Statements for other four fiscal years, which books and records accurately reflect in all material respects the accounts and transactions recorded therein, (ii) present fairly the finan- cial position, results of operations, changes in stock- holders equity and changes in financial position of G-Modelo and its subsidiaries as of and for the periods in which they relate, and (iii) have been prepared in accordance with Mexican GAAP consistently applied throug- hout the periods covered, except as otherwise noted therein and except that the Unaudited Consolidated Finan- cial Statements are subject to any normal and recurring adjustments which may arise from the audit of the fiscal year ended December 31, 1993. The consolidated books and records of G-Modelo and its subsidiaries reflect that as of December 31, 1992, G-Modelo and the G-Modelo Corpora- tions had cufine (Cuenta De Utilidad Fiscal Neta) in an aggregate amount equal to 2,216,147,495 Mexican Pesos. 3.8. Undisclosed Liabilities; Absence of Certain Changes. Neither G-Modelo nor any G-Modelo Corporation has any liabilities or obligations of any nature, secured or unsecured (absolute, accrued, contin19

gent or otherwise and whether due or to become due), except liabilities and obligations which are fully re- flected, reserved against or disclosed in the G-Modelo Balance Sheet or the notes to the Audited Consolidated GModelo Financial Statements and except for liabilities and obligations incurred in the ordinary course of business and consistent with past practice since December 31, 1992. Except as contemplated by this Agreement, since December 31, 1992 there has not been any material adverse change in the business, assets, operations, prospects or financial condition of G-Modelo and the G-Modelo Corpora- tions, taken as a whole. 3.9. Title and Related Matters. Except with respect to the Patent and Trademark Rights (as defined in Section 3.10 and as to which the representations in Section 3.10 shall apply) and Real Property (as defined in Section 3.20 and as to which the representations in Section 3.20 apply): the G-Modelo Corporations have good and marketable title, free and clear of all Encumbrances, to (a) all properties and assets (personal, tangible, intangible and mixed) reflected in the GModelo Balance Sheet or acquired after the date thereof by such corpora- tions, and (b) all other material properties and assets owned by G-Modelo and the G-Modelo Corporations, except in each case for (i) any of such properties or assets sold or otherwise disposed of in the ordinary course of business, (ii) liens for current taxes not yet due or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established and disclosed in writing to the Investor, and (iii) Encumbrances which are not material to the value of the properties or assets encumbered and which do not impair in any material respect the current use or opera- tion of such properties and assets. 3.10. Patents, Trademarks, Etc. Schedule 3.10 sets forth a list of all patents, common law and regis- tered trademarks and service marks, applications for trademark and service mark registrations, and copyright registrations owned by G-Modelo or any of the G-Modelo Corporations (the "Patent and Trademark Rights"). Except as set forth on Schedule 3.10, (a) no other company is licensed or authorized by G-Modelo or any of the G-Modelo Corporations to use any of the Patent and Trademark Rights; (b) neither G-Modelo nor any GModelo Corporation uses any of the Patent and Trademark Rights by consent of 20

gent or otherwise and whether due or to become due), except liabilities and obligations which are fully re- flected, reserved against or disclosed in the G-Modelo Balance Sheet or the notes to the Audited Consolidated GModelo Financial Statements and except for liabilities and obligations incurred in the ordinary course of business and consistent with past practice since December 31, 1992. Except as contemplated by this Agreement, since December 31, 1992 there has not been any material adverse change in the business, assets, operations, prospects or financial condition of G-Modelo and the G-Modelo Corpora- tions, taken as a whole. 3.9. Title and Related Matters. Except with respect to the Patent and Trademark Rights (as defined in Section 3.10 and as to which the representations in Section 3.10 shall apply) and Real Property (as defined in Section 3.20 and as to which the representations in Section 3.20 apply): the G-Modelo Corporations have good and marketable title, free and clear of all Encumbrances, to (a) all properties and assets (personal, tangible, intangible and mixed) reflected in the GModelo Balance Sheet or acquired after the date thereof by such corpora- tions, and (b) all other material properties and assets owned by G-Modelo and the G-Modelo Corporations, except in each case for (i) any of such properties or assets sold or otherwise disposed of in the ordinary course of business, (ii) liens for current taxes not yet due or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established and disclosed in writing to the Investor, and (iii) Encumbrances which are not material to the value of the properties or assets encumbered and which do not impair in any material respect the current use or opera- tion of such properties and assets. 3.10. Patents, Trademarks, Etc. Schedule 3.10 sets forth a list of all patents, common law and regis- tered trademarks and service marks, applications for trademark and service mark registrations, and copyright registrations owned by G-Modelo or any of the G-Modelo Corporations (the "Patent and Trademark Rights"). Except as set forth on Schedule 3.10, (a) no other company is licensed or authorized by G-Modelo or any of the G-Modelo Corporations to use any of the Patent and Trademark Rights; (b) neither G-Modelo nor any GModelo Corporation uses any of the Patent and Trademark Rights by consent of 20

or license from any other rightful owner thereof, and the same are free and clear of Encumbrances, and GModelo or a G-Modelo Corporation has the right to exclude others from making, using, or selling the invention of such patents and has the exclusive right to use such common law and registered marks and copyrighted works on the goods or services for which they are currently used, or on the goods and services specified in the respective trademark registrations subject to any conditions or limitations therein; (c) the conduct of the business of the GModelo Corporations as now being conducted in Mexico, Canada and the United States does not conflict with any patents, trademarks, service marks, names, trade names or copyrights of others in any way which has an adverse effect on the business, assets, operations, prospects or financial condition of G-Modelo and the GModelo Corporations, taken as a whole; (d) G-Modelo and the G-Modelo Corporations have no knowledge that the conduct of the business of the G-Modelo Corporations as now being conducted in any country other than Mexico, Canada or the United States conflicts with any patents, trademarks, service marks, names, trade names or copy- rights of others in any way which has a material adverse effect on the business, assets, operations, prospects or financial condition of G-Modelo and G-Modelo Corpora- tions, taken as a whole; (e) the G-Modelo Corporations solely own good and valid title to the Patent and Trade- mark Rights in Mexico, Canada and the United States, and to the Controlling Shareholders' best knowledge after due inquiry, there is no fact which raises any issue as to the validity of the Patent and Trademark Rights in Mexi- co, Canada and the United States; (f) the G-Modelo Corpo- rations solely own good and valid title to the Patent and Trademark Rights used in the conduct of the business of the G-Modelo Corporations as now being conducted in any country other than Mexico, Canada or the United States, and except as set forth on Schedule 3.10, to the Control- ling Shareholders' best knowledge after due inquiry, there is no fact which raises any issue as to the validi- ty of the Patent and Trademark Rights; (g) except as set forth on Schedule 3.10, there is no pending litigation in a court or proceedings in any administrative agency, nor has G-Modelo or any G-Modelo Corporation received any notice or other communication, in which any of the Patent and Trademark Rights are being challenged or contested; (h) except as set forth on Schedule 3.10, neither G- Modelo nor any G-Modelo Corporation received any pro21

or license from any other rightful owner thereof, and the same are free and clear of Encumbrances, and GModelo or a G-Modelo Corporation has the right to exclude others from making, using, or selling the invention of such patents and has the exclusive right to use such common law and registered marks and copyrighted works on the goods or services for which they are currently used, or on the goods and services specified in the respective trademark registrations subject to any conditions or limitations therein; (c) the conduct of the business of the GModelo Corporations as now being conducted in Mexico, Canada and the United States does not conflict with any patents, trademarks, service marks, names, trade names or copyrights of others in any way which has an adverse effect on the business, assets, operations, prospects or financial condition of G-Modelo and the GModelo Corporations, taken as a whole; (d) G-Modelo and the G-Modelo Corporations have no knowledge that the conduct of the business of the G-Modelo Corporations as now being conducted in any country other than Mexico, Canada or the United States conflicts with any patents, trademarks, service marks, names, trade names or copy- rights of others in any way which has a material adverse effect on the business, assets, operations, prospects or financial condition of G-Modelo and G-Modelo Corpora- tions, taken as a whole; (e) the G-Modelo Corporations solely own good and valid title to the Patent and Trade- mark Rights in Mexico, Canada and the United States, and to the Controlling Shareholders' best knowledge after due inquiry, there is no fact which raises any issue as to the validity of the Patent and Trademark Rights in Mexi- co, Canada and the United States; (f) the G-Modelo Corpo- rations solely own good and valid title to the Patent and Trademark Rights used in the conduct of the business of the G-Modelo Corporations as now being conducted in any country other than Mexico, Canada or the United States, and except as set forth on Schedule 3.10, to the Control- ling Shareholders' best knowledge after due inquiry, there is no fact which raises any issue as to the validi- ty of the Patent and Trademark Rights; (g) except as set forth on Schedule 3.10, there is no pending litigation in a court or proceedings in any administrative agency, nor has G-Modelo or any G-Modelo Corporation received any notice or other communication, in which any of the Patent and Trademark Rights are being challenged or contested; (h) except as set forth on Schedule 3.10, neither G- Modelo nor any G-Modelo Corporation received any pro21

tests, claims, notices, or other communications relating to infringement of the rights of others arising from the present use of the Patent and Trademark Rights, and to the Controlling Shareholders' best knowledge after due inquiry, the subject matter of the Patent and Trademark Rights do not thereby infringe; and (i) none of the Controlling Shareholders, G-Modelo or any G-Modelo Corpo- ration has contracted to provide indemnification for infringement of the intellectual property rights of others, or to grant any license of the Patent and Trade- mark Rights to any other party or receive a license to use any patent, trademark or copyright from a third party, except as set forth in Schedule 3.10, or to under- take or covenant not to sue any other party with respect to the Patent and Trademark Rights. 3.11. Litigation. Except as set forth in Schedule 3.11, there are no (a) actions, suits, proceed- ings or investigations, pending or, to the Controlling Shareholders' best knowledge after due inquiry, threat- ened, against G-Modelo or any G-Modelo Corporation or (b) orders, injunctions or decrees of any court or governmen- tal agency against or affecting G-Modelo or any G-Modelo Corporation, which in either (a) or (b) above would have a material adverse effect on the business, assets, opera- tions, prospects or financial condition of G-Modelo and the G-Modelo Corporations, taken as a whole. There are no actions, suits, proceedings or investigations, pending or, to the Controlling Shareholders' best knowledge after due inquiry, threatened, which would give any third party the right to enjoin or rescind or cause a material alter- ation in the transactions contemplated hereby. 3.12. Compliance with Laws. G-Modelo and each G-Modelo Corporation is in compliance in all material respects with all laws, rules, regulations and orders applicable to their respective businesses, and G-Modelo and each G-Modelo Corporation has lawfully obtained all necessary permits, licenses and governmental authorizations required for the ownership, use or occupancy of their properties and assets and the carrying on of their business as currently conducted, except for all such failures to have any such permit, license or governmental authorizations which would not, in the aggregate, have a material adverse effect on the business, assets, operations, prospects or financial condition of G-Modelo and the G-Modelo Corporations, taken as a whole. 22 3.13. Tax Matters.

tests, claims, notices, or other communications relating to infringement of the rights of others arising from the present use of the Patent and Trademark Rights, and to the Controlling Shareholders' best knowledge after due inquiry, the subject matter of the Patent and Trademark Rights do not thereby infringe; and (i) none of the Controlling Shareholders, G-Modelo or any G-Modelo Corpo- ration has contracted to provide indemnification for infringement of the intellectual property rights of others, or to grant any license of the Patent and Trade- mark Rights to any other party or receive a license to use any patent, trademark or copyright from a third party, except as set forth in Schedule 3.10, or to under- take or covenant not to sue any other party with respect to the Patent and Trademark Rights. 3.11. Litigation. Except as set forth in Schedule 3.11, there are no (a) actions, suits, proceed- ings or investigations, pending or, to the Controlling Shareholders' best knowledge after due inquiry, threat- ened, against G-Modelo or any G-Modelo Corporation or (b) orders, injunctions or decrees of any court or governmen- tal agency against or affecting G-Modelo or any G-Modelo Corporation, which in either (a) or (b) above would have a material adverse effect on the business, assets, opera- tions, prospects or financial condition of G-Modelo and the G-Modelo Corporations, taken as a whole. There are no actions, suits, proceedings or investigations, pending or, to the Controlling Shareholders' best knowledge after due inquiry, threatened, which would give any third party the right to enjoin or rescind or cause a material alter- ation in the transactions contemplated hereby. 3.12. Compliance with Laws. G-Modelo and each G-Modelo Corporation is in compliance in all material respects with all laws, rules, regulations and orders applicable to their respective businesses, and G-Modelo and each G-Modelo Corporation has lawfully obtained all necessary permits, licenses and governmental authorizations required for the ownership, use or occupancy of their properties and assets and the carrying on of their business as currently conducted, except for all such failures to have any such permit, license or governmental authorizations which would not, in the aggregate, have a material adverse effect on the business, assets, operations, prospects or financial condition of G-Modelo and the G-Modelo Corporations, taken as a whole. 22 3.13. Tax Matters. (a) All Tax Returns (as hereinafter defined) required to be filed by G-Modelo or the G-Modelo Corporations (collectively, the "Taxpayers") have been filed on a timely basis and are in all material respects true, complete and correct; (b) All Taxes (as hereinafter defined) that are due and payable or claimed or asserted to be due and payable by the Taxpayers by any tax authority for all periods up to and including the Closing Date have been paid or provided for, except for Taxes which are the subject of customary challenges by the Ministry of Trea- sury and the aggregate amount of which claimed by the Ministry to be due does not exceed 3,500,000 Mexican Pesos in any year; (c) There are no liens for Taxes upon the assets of any of the Taxpayers; (d) The Taxpayers have complied in all material respects with all applicable laws, rules and regulations relating to the payment and withholding of Taxes pursuant to all applicable tax provisions concern- ing tax withholding or similar provisions and have, within the time and in the manner prescribed by law, paid over to the proper governmental authorities all amounts required to be so withheld and paid over under all appli- cable laws; (e) (i) Except for the tax years 1988 through 1992, the statute of limitations for the assess- ment of all Taxes under the Mexican income tax and the United States federal income tax laws have expired for all applicable returns of the Taxpayers or an audit of those returns has been completed by the appropriate taxing authorities for all periods ending on or before the Closing Date, (ii) no deficiency for any Taxes has been proposed, asserted or assessed which has not been finally resolved, (iii) neither the Controlling Share- holders nor the Taxpayers know of any facts that are likely to result in any assertion or assessment of a Tax with respect to any past taxable period, and (iv) no taxing authority has successfully asserted any issue concerning the liability of the Taxpayers for Taxes that by application of similar principles could result in any 23

3.13. Tax Matters. (a) All Tax Returns (as hereinafter defined) required to be filed by G-Modelo or the G-Modelo Corporations (collectively, the "Taxpayers") have been filed on a timely basis and are in all material respects true, complete and correct; (b) All Taxes (as hereinafter defined) that are due and payable or claimed or asserted to be due and payable by the Taxpayers by any tax authority for all periods up to and including the Closing Date have been paid or provided for, except for Taxes which are the subject of customary challenges by the Ministry of Trea- sury and the aggregate amount of which claimed by the Ministry to be due does not exceed 3,500,000 Mexican Pesos in any year; (c) There are no liens for Taxes upon the assets of any of the Taxpayers; (d) The Taxpayers have complied in all material respects with all applicable laws, rules and regulations relating to the payment and withholding of Taxes pursuant to all applicable tax provisions concern- ing tax withholding or similar provisions and have, within the time and in the manner prescribed by law, paid over to the proper governmental authorities all amounts required to be so withheld and paid over under all appli- cable laws; (e) (i) Except for the tax years 1988 through 1992, the statute of limitations for the assess- ment of all Taxes under the Mexican income tax and the United States federal income tax laws have expired for all applicable returns of the Taxpayers or an audit of those returns has been completed by the appropriate taxing authorities for all periods ending on or before the Closing Date, (ii) no deficiency for any Taxes has been proposed, asserted or assessed which has not been finally resolved, (iii) neither the Controlling Share- holders nor the Taxpayers know of any facts that are likely to result in any assertion or assessment of a Tax with respect to any past taxable period, and (iv) no taxing authority has successfully asserted any issue concerning the liability of the Taxpayers for Taxes that by application of similar principles could result in any 23

assertion or assessment of a Tax for another taxable period; (f) No Tax audits or other administrative proceedings or court proceedings are now pending with regard to any Taxes or Tax Returns of the Taxpayers; (g) None of the transactions contemplated by or completed with respect to this Agreement has or will cause the Taxpayers to incur any additional Tax liability as a result thereof; (h) The Taxpayers have not incurred any Tax liabilities for the period beginning January 1, 1993 and ending on the Closing Date other than Tax liabilities incurred in the ordinary course of their business; and (i) For purposes of this Agreement, (i) "Taxes" shall mean all taxes, charges, fees, levies or other assessments, including, without limitation, income tax, property tax, value added tax, all other net income, sales, use, ad valorem, beer excise, transfer, license, withholding, payroll, employment, social security, INFON- AVIT, SAR, estimated, property or other taxes, customs duties, fees, assessments or charges of any kind whatso- ever, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing authority of any jurisdiction upon any of the Taxpayers, and (ii) "Tax Returns" shall mean all returns, declarations, reports, information returns and state- ments required to be filed by any of the Taxpayers in connection with Taxes. 3.14. Shareholder Agreements. Except for the Control Trust Agreement, the Option Trust Agreement and the Banamex Trust Agreement, there are no contracts, agreements or understandings, whether written or oral (including any and all amendments thereto), among or between the shareholders of G-Modelo or any G-Modelo Corporation or any Related Person thereof or between a shareholder of G-Modelo or any G-Modelo Corporation or any Related Person thereof and G-Modelo or any G-Modelo Corporation with respect to the shares of the capital stock of G-Modelo or any G-Modelo Corporation or the business or operations of GModelo or any G-Modelo Corpo- ration.

assertion or assessment of a Tax for another taxable period; (f) No Tax audits or other administrative proceedings or court proceedings are now pending with regard to any Taxes or Tax Returns of the Taxpayers; (g) None of the transactions contemplated by or completed with respect to this Agreement has or will cause the Taxpayers to incur any additional Tax liability as a result thereof; (h) The Taxpayers have not incurred any Tax liabilities for the period beginning January 1, 1993 and ending on the Closing Date other than Tax liabilities incurred in the ordinary course of their business; and (i) For purposes of this Agreement, (i) "Taxes" shall mean all taxes, charges, fees, levies or other assessments, including, without limitation, income tax, property tax, value added tax, all other net income, sales, use, ad valorem, beer excise, transfer, license, withholding, payroll, employment, social security, INFON- AVIT, SAR, estimated, property or other taxes, customs duties, fees, assessments or charges of any kind whatso- ever, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing authority of any jurisdiction upon any of the Taxpayers, and (ii) "Tax Returns" shall mean all returns, declarations, reports, information returns and state- ments required to be filed by any of the Taxpayers in connection with Taxes. 3.14. Shareholder Agreements. Except for the Control Trust Agreement, the Option Trust Agreement and the Banamex Trust Agreement, there are no contracts, agreements or understandings, whether written or oral (including any and all amendments thereto), among or between the shareholders of G-Modelo or any G-Modelo Corporation or any Related Person thereof or between a shareholder of G-Modelo or any G-Modelo Corporation or any Related Person thereof and G-Modelo or any G-Modelo Corporation with respect to the shares of the capital stock of G-Modelo or any G-Modelo Corporation or the business or operations of GModelo or any G-Modelo Corpo- ration. 24 3.15. Consents. No consent, approval or authorization of, or exemption by, or filing with, any governmental or regulatory authority (other than as may be required under the HSR Act or the Law on Economic Competition ("LEC")) is required in connection with the execution, delivery and performance by the G-Modelo Signatories of the transactions contemplated by this Agreement. 3.16. Environmental Matters. (a) The opera- tions of G-Modelo and the G-Modelo Corporations comply in all material respects with all Federal, state and local environmental and health and safety statutes and regula- tions; (b) neither G-Modelo nor any G-Modelo Corporation nor, to the Controlling Shareholders' best knowledge after due inquiry, any prior owner or tenant of the Real Property has made, caused or contributed to any release of any hazardous or toxic waste, substance or constitu- ent, into the environment; (c) none of the operations of GModelo or any G-Modelo Corporation is subject to any judicial or administrative proceeding alleging the violation of any Federal, state or local environmental or health or safety statute or regulation; (d) none of the operations of G-Modelo or any G-Modelo Corporation is subject to any compliance agreement or settlement agree- ment resulting from an alleged violation of any Federal, state or local environmental or health or safety statute regulation; (e) none of the operations of G-Modelo or any G-Modelo Corporation is the subject of any Federal, state or local investigation or threatened investigation re- garding a violation or alleged violation of any Federal, state or local environmental or health or safety statute or regulation; (f) none of the operations of GModelo or any G-Modelo Corporation is required to file a notice or report pursuant to any Federal, state or local environ- mental or health or safety statute or regulation of any past or present spill or release of hazardous or toxic substance or constituent into the environment; (g) none of the businesses of G-Modelo or any G-Modelo Corporation involves the generation, transportation, treatment, stor- age or disposal of hazardous or toxic waste; (h) G-Modelo and the G-Modelo Corporations have no knowledge of any hazardous wastes or toxic substances in, on, over or under the Real Property; and (i) G-Modelo and the G- Modelo Corporations possess all material environmental permits and authorizations required by any Federal, state 25

3.15. Consents. No consent, approval or authorization of, or exemption by, or filing with, any governmental or regulatory authority (other than as may be required under the HSR Act or the Law on Economic Competition ("LEC")) is required in connection with the execution, delivery and performance by the G-Modelo Signatories of the transactions contemplated by this Agreement. 3.16. Environmental Matters. (a) The opera- tions of G-Modelo and the G-Modelo Corporations comply in all material respects with all Federal, state and local environmental and health and safety statutes and regula- tions; (b) neither G-Modelo nor any G-Modelo Corporation nor, to the Controlling Shareholders' best knowledge after due inquiry, any prior owner or tenant of the Real Property has made, caused or contributed to any release of any hazardous or toxic waste, substance or constitu- ent, into the environment; (c) none of the operations of GModelo or any G-Modelo Corporation is subject to any judicial or administrative proceeding alleging the violation of any Federal, state or local environmental or health or safety statute or regulation; (d) none of the operations of G-Modelo or any G-Modelo Corporation is subject to any compliance agreement or settlement agree- ment resulting from an alleged violation of any Federal, state or local environmental or health or safety statute regulation; (e) none of the operations of G-Modelo or any G-Modelo Corporation is the subject of any Federal, state or local investigation or threatened investigation re- garding a violation or alleged violation of any Federal, state or local environmental or health or safety statute or regulation; (f) none of the operations of GModelo or any G-Modelo Corporation is required to file a notice or report pursuant to any Federal, state or local environ- mental or health or safety statute or regulation of any past or present spill or release of hazardous or toxic substance or constituent into the environment; (g) none of the businesses of G-Modelo or any G-Modelo Corporation involves the generation, transportation, treatment, stor- age or disposal of hazardous or toxic waste; (h) G-Modelo and the G-Modelo Corporations have no knowledge of any hazardous wastes or toxic substances in, on, over or under the Real Property; and (i) G-Modelo and the G- Modelo Corporations possess all material environmental permits and authorizations required by any Federal, state 25

or local environmental or health and safety statute or regulation to conduct their operations. 3.17. Absence of Certain Changes or Events. Except as set forth in Schedule 3.17, since December 31, 1992 there has not been (i) any material adverse change in the business, assets, operations, prospects or finan- cial condition of G-Modelo and the G-Modelo Corporations, taken as a whole; (ii) any significant damage, destruction or loss affecting G-Modelo or any of the G-Modelo Corporations, which is not substantially covered by insurance; (iii) any material increase in the compensa- tion payable or to become payable by G-Modelo or any G-Modelo Corporation to its officers or key employees; (iv) any material increase in any bonus, insurance, pension or other employee benefit plan, payment or arrangement made to, for or with any such officers or key employees; or (v) any entry into any agreement, commitment or transaction (including, without limitation, any borrowing, capital expenditure or capital financing) by GModelo or any G-Modelo Corporation, except agreements, commitments or transactions in the ordinary course of business and consistent with past practice; or (vi) any change by G-Modelo or any G-Modelo Corporation in ac- counting methods, principles or practices except as required by Mexican GAAP. 3.18. Material Contracts. Except for the information which will be provided on the Schedule to be delivered to the Investor pursuant to Section 7.2(a)(v), Schedule 3.18 contains a list of each material contract, license, lease, agreement or understanding (including, without limitation, with governments or governmental agencies), whether written or oral (including any and all amendments thereto), to which G-Modelo or any G-Modelo Corporation is a party or by which any of their respec- tive properties or assets may be bound (a "Material Contract"); and where such Material Contract is with a party which is not a G-Modelo Corporation and is oral or is evidenced only by form purchase orders, Schedule 3.18 identifies the commodity purchased or sold, the supplier or purchaser thereof, the annual quantity purchased or sold and a recent representative price therefor; provided, however, in the case of Material Contracts which are subject to confidentiality agreements between the parties, Schedule 3.18 sets forth only the parties there- to and the subject matter thereof; and provided, further, 26

such contracts are on an arm's-length basis and the price terms thereof are at or below market. For purposes of

or local environmental or health and safety statute or regulation to conduct their operations. 3.17. Absence of Certain Changes or Events. Except as set forth in Schedule 3.17, since December 31, 1992 there has not been (i) any material adverse change in the business, assets, operations, prospects or finan- cial condition of G-Modelo and the G-Modelo Corporations, taken as a whole; (ii) any significant damage, destruction or loss affecting G-Modelo or any of the G-Modelo Corporations, which is not substantially covered by insurance; (iii) any material increase in the compensa- tion payable or to become payable by G-Modelo or any G-Modelo Corporation to its officers or key employees; (iv) any material increase in any bonus, insurance, pension or other employee benefit plan, payment or arrangement made to, for or with any such officers or key employees; or (v) any entry into any agreement, commitment or transaction (including, without limitation, any borrowing, capital expenditure or capital financing) by GModelo or any G-Modelo Corporation, except agreements, commitments or transactions in the ordinary course of business and consistent with past practice; or (vi) any change by G-Modelo or any G-Modelo Corporation in ac- counting methods, principles or practices except as required by Mexican GAAP. 3.18. Material Contracts. Except for the information which will be provided on the Schedule to be delivered to the Investor pursuant to Section 7.2(a)(v), Schedule 3.18 contains a list of each material contract, license, lease, agreement or understanding (including, without limitation, with governments or governmental agencies), whether written or oral (including any and all amendments thereto), to which G-Modelo or any G-Modelo Corporation is a party or by which any of their respec- tive properties or assets may be bound (a "Material Contract"); and where such Material Contract is with a party which is not a G-Modelo Corporation and is oral or is evidenced only by form purchase orders, Schedule 3.18 identifies the commodity purchased or sold, the supplier or purchaser thereof, the annual quantity purchased or sold and a recent representative price therefor; provided, however, in the case of Material Contracts which are subject to confidentiality agreements between the parties, Schedule 3.18 sets forth only the parties there- to and the subject matter thereof; and provided, further, 26

such contracts are on an arm's-length basis and the price terms thereof are at or below market. For purposes of this Section 3.18, a Material Contract shall include, without limitation, (a) any agreement, contract, commit- ment, understanding or arrangement (a "Material Agree- ment") requiring total payments of more than 1 million Mexican Pesos (except with respect to oral agreements which shall be deemed to be Material Agreements only if they require total payments of 3 million or more Mexican Pesos) and having a term exceeding six months and which may not be cancelled upon 90 or fewer days' notice with- out any liability, penalty or premium (other than a nominal cancellation fee or charge); (b) one or more purchase orders for a single product or service which require aggregate payments in any twelve month period of 3 million or more Mexican Pesos; (c) any Material Agree- ment which might reasonably be expected to have a materi- al adverse effect on the business, assets, operations, prospects or financial condition of G-Modelo and the G-Modelo Corporations, taken as a whole; (d) any covenant not to compete; (e) any Material Agreement (other than the Material Agreements listed on Schedule 3.14) (1) requiring total payments of more than 100,000 United States dollars in any twelve month period and (2) which is between or among G-Modelo or a G-Modelo Corporation and any Controlling Shareholder who owns 1 percent or more of the capital stock of G-Modelo or any entity in which such Controlling Shareholder owns 1 percent or more of the capital stock and (3) which involves the business or operations of G-Modelo or any G-Modelo Corporation or requires the payment of money or the provision of servic- es to or by G-Modelo or any G-Modelo Corporation; or (f) any other Material Agreement which is material to the business, assets, operations, prospects or financial condition of G-Modelo or any G-Modelo Corporation. Except as disclosed in Schedule 3.18, none of the Con- trolling Shareholders, G-Modelo or any GModelo Corpora- tion or any other party to a Material Contract is in default in any material respect thereunder. The infor- mation required by the first sentence of this Section 3.18 with respect to oral contracts and purchase orders to be set forth on Schedule 3.18, may be delivered to the Investor within a reasonable time (not to exceed ninety days) following the Closing. 3.19. Employee Benefits; Employment Contracts. Schedule 3.19 contains a list of all material plans, pro27

such contracts are on an arm's-length basis and the price terms thereof are at or below market. For purposes of this Section 3.18, a Material Contract shall include, without limitation, (a) any agreement, contract, commit- ment, understanding or arrangement (a "Material Agree- ment") requiring total payments of more than 1 million Mexican Pesos (except with respect to oral agreements which shall be deemed to be Material Agreements only if they require total payments of 3 million or more Mexican Pesos) and having a term exceeding six months and which may not be cancelled upon 90 or fewer days' notice with- out any liability, penalty or premium (other than a nominal cancellation fee or charge); (b) one or more purchase orders for a single product or service which require aggregate payments in any twelve month period of 3 million or more Mexican Pesos; (c) any Material Agree- ment which might reasonably be expected to have a materi- al adverse effect on the business, assets, operations, prospects or financial condition of G-Modelo and the G-Modelo Corporations, taken as a whole; (d) any covenant not to compete; (e) any Material Agreement (other than the Material Agreements listed on Schedule 3.14) (1) requiring total payments of more than 100,000 United States dollars in any twelve month period and (2) which is between or among G-Modelo or a G-Modelo Corporation and any Controlling Shareholder who owns 1 percent or more of the capital stock of G-Modelo or any entity in which such Controlling Shareholder owns 1 percent or more of the capital stock and (3) which involves the business or operations of G-Modelo or any G-Modelo Corporation or requires the payment of money or the provision of servic- es to or by G-Modelo or any G-Modelo Corporation; or (f) any other Material Agreement which is material to the business, assets, operations, prospects or financial condition of G-Modelo or any G-Modelo Corporation. Except as disclosed in Schedule 3.18, none of the Con- trolling Shareholders, G-Modelo or any GModelo Corpora- tion or any other party to a Material Contract is in default in any material respect thereunder. The infor- mation required by the first sentence of this Section 3.18 with respect to oral contracts and purchase orders to be set forth on Schedule 3.18, may be delivered to the Investor within a reasonable time (not to exceed ninety days) following the Closing. 3.19. Employee Benefits; Employment Contracts. Schedule 3.19 contains a list of all material plans, pro27

grams, policies, contracts, agreements or understandings, whether written or oral (including any and all amendments thereto), to which G-Modelo or any G-Modelo Corporation is a party which relate to all employment, bonus, profit- -sharing, deferred compensation, pension, employee bene- fit, welfare and retirement plans, stock purchase and stock option plans, consulting arrangements in excess of 1 million Mexican Pesos per year and all labor union and collective bargaining agreements. 3.20. Real Property. As used herein, the term "Real Property" shall mean all of the following: (1) all material land and easements owned, used or occupied by G-Modelo or any of the G-Mode- lo Corporations and all material buildings, structures and other improvements thereof or thereon; and (2) all rights and appurtenances in and to the Real Property described in subparagraph (1) above; and (3) all material real estate leasehold interests owned by G-Modelo or any G-Modelo Corporation as a tenant, excluding leases from G-Modelo or any G- Modelo Corporation, and all other real property interests owned by any of the G-Modelo Corporations. (a) G-Modelo or a G-Modelo Corporation has good and marketable title to the Real Property di- rectly or indirectly through trusts, free and clear of all easements, restrictions, covenants, conditions or Encumbrances of any character whatsoever except (i) conditions or restrictions which do not with respect to the parcel of Real Property so encumbered have a material adverse effect on the actual or intended use of such property, (ii) public or private roadway rights-of-way or utility easements which do not underlie any buildings, (iii) real property leases to a G-Modelo Corporation, and (iv) taxes and assessments which are a lien but which are not yet due and payable or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established and disclosed in writing to the Investor. 28

grams, policies, contracts, agreements or understandings, whether written or oral (including any and all amendments thereto), to which G-Modelo or any G-Modelo Corporation is a party which relate to all employment, bonus, profit- -sharing, deferred compensation, pension, employee bene- fit, welfare and retirement plans, stock purchase and stock option plans, consulting arrangements in excess of 1 million Mexican Pesos per year and all labor union and collective bargaining agreements. 3.20. Real Property. As used herein, the term "Real Property" shall mean all of the following: (1) all material land and easements owned, used or occupied by G-Modelo or any of the G-Mode- lo Corporations and all material buildings, structures and other improvements thereof or thereon; and (2) all rights and appurtenances in and to the Real Property described in subparagraph (1) above; and (3) all material real estate leasehold interests owned by G-Modelo or any G-Modelo Corporation as a tenant, excluding leases from G-Modelo or any G- Modelo Corporation, and all other real property interests owned by any of the G-Modelo Corporations. (a) G-Modelo or a G-Modelo Corporation has good and marketable title to the Real Property di- rectly or indirectly through trusts, free and clear of all easements, restrictions, covenants, conditions or Encumbrances of any character whatsoever except (i) conditions or restrictions which do not with respect to the parcel of Real Property so encumbered have a material adverse effect on the actual or intended use of such property, (ii) public or private roadway rights-of-way or utility easements which do not underlie any buildings, (iii) real property leases to a G-Modelo Corporation, and (iv) taxes and assessments which are a lien but which are not yet due and payable or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established and disclosed in writing to the Investor. 28

(b) The Real Property conforms in all material respects to any and all applicable state and local laws, zoning and building ordinances and health and safety ordinances, and no zoning, building or similar law or ordinance or regulation is being violated by the operation or use of the Real Property in any manner having a material adverse effect on the marketability or the actual or intended use or operation of the Real Property. Neither G-Modelo nor any G-Modelo Corporation has received any notice of any material violation of any law, ordinance or regulation in connection with the operation or use of such Real Property. (c) None of the Real Property is subject to the Federal Law of the Agrarian Reform. (d) With respect to any Real Property located (i) within one hundred kilometers of the border of Mexico and any of the United States, Belize or Guate- mala or (ii) within fifty kilometers of any of Mexico's coastlines (the "Restricted Zone"), either (A) all of the outstanding shares of capital stock of the G-Modelo Corporations which own Real Property located within the Restricted Zone have been duly transferred into the Real Estate Trust or as promptly as practicable following the Closing will be duly transferred into a trust to be established under a trust agreement for the benefit of such G-Modelo Corporations pursuant to Section 5.14, or (B) the by-laws of the GModelo Corporations which own Real Property in the Restricted Zone permit the indirect ownership by foreigners of capital stock of such G-Modelo Corporations. 3.21. Tied House Prohibitions. There is no Mexican statute, rule or regulation applicable to G- Modelo or any G-Modelo Corporation which prohibits G- Modelo or any G-Modelo Corporation or its shareholders from selling alcoholic beverages, on either a retail or wholesale basis. 3.22. Insurance. G-Modelo and each G-Modelo Corporation have policies of liability, fire, automobile, property and other forms of insurance, all of which are valid and enforceable and in full force and effect, are underwritten by unaffiliated financially sound and repu- table insurers, are sufficient for all applicable re- quirements of law and provide insurance, including, 29

(b) The Real Property conforms in all material respects to any and all applicable state and local laws, zoning and building ordinances and health and safety ordinances, and no zoning, building or similar law or ordinance or regulation is being violated by the operation or use of the Real Property in any manner having a material adverse effect on the marketability or the actual or intended use or operation of the Real Property. Neither G-Modelo nor any G-Modelo Corporation has received any notice of any material violation of any law, ordinance or regulation in connection with the operation or use of such Real Property. (c) None of the Real Property is subject to the Federal Law of the Agrarian Reform. (d) With respect to any Real Property located (i) within one hundred kilometers of the border of Mexico and any of the United States, Belize or Guate- mala or (ii) within fifty kilometers of any of Mexico's coastlines (the "Restricted Zone"), either (A) all of the outstanding shares of capital stock of the G-Modelo Corporations which own Real Property located within the Restricted Zone have been duly transferred into the Real Estate Trust or as promptly as practicable following the Closing will be duly transferred into a trust to be established under a trust agreement for the benefit of such G-Modelo Corporations pursuant to Section 5.14, or (B) the by-laws of the GModelo Corporations which own Real Property in the Restricted Zone permit the indirect ownership by foreigners of capital stock of such G-Modelo Corporations. 3.21. Tied House Prohibitions. There is no Mexican statute, rule or regulation applicable to G- Modelo or any G-Modelo Corporation which prohibits G- Modelo or any G-Modelo Corporation or its shareholders from selling alcoholic beverages, on either a retail or wholesale basis. 3.22. Insurance. G-Modelo and each G-Modelo Corporation have policies of liability, fire, automobile, property and other forms of insurance, all of which are valid and enforceable and in full force and effect, are underwritten by unaffiliated financially sound and repu- table insurers, are sufficient for all applicable re- quirements of law and provide insurance, including, 29

without limitation, liability and products liability insurance, in such amounts and against such risks as is customary for companies engaged in similar businesses to G-Modelo and the G-Modelo Corporations in Mexico to protect the properties, assets, businesses and operations of G-Modelo and each of the G-Modelo Corporations. All such policies will remain in full force and effect through their respective dates and will not in any way be affect- ed by or terminate or lapse by reason of, any of the transactions contemplated hereby. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF A-B, A-BI AND THE INVESTOR A-B, A-BI and the Investor, jointly and sever- ally, represent and warrant to each of the G-Modelo Signatories, the Option Trust and the Banamex Trust as follows: 4.1. Corporate Power and Authority; Effect of Agreement. Each of A-B, A-BI and the Investor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Each of A-B, A-BI and the Investor has all requisite corporate power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by each of A-B, A-BI and the Investor of its obligations under this Agreement and the consummation by each of A-B, A-BI and the Investor of the transactions contemplated hereby have been duly authorized by the Board of Directors of each of A-B, A-BI and the Investor, and no other corpo- rate action or proceeding on the part of each of A-B, A-BI and the Investor or their stockholders is necessary to authorize this Agreement or the consummation of any of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by each of A-B, A-BI and the Investor and constitutes the valid and binding obligation of each of A-B, A-BI and the Investor, enforceable against each of them in accordance with its terms. The execution, delivery and performance by the each of A-B, A-BI and Investor of this Agreement and the consummation by each of A-B, A-BI and the Investor of the transactions contemplated hereby does not and will not,

without limitation, liability and products liability insurance, in such amounts and against such risks as is customary for companies engaged in similar businesses to G-Modelo and the G-Modelo Corporations in Mexico to protect the properties, assets, businesses and operations of G-Modelo and each of the G-Modelo Corporations. All such policies will remain in full force and effect through their respective dates and will not in any way be affect- ed by or terminate or lapse by reason of, any of the transactions contemplated hereby. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF A-B, A-BI AND THE INVESTOR A-B, A-BI and the Investor, jointly and sever- ally, represent and warrant to each of the G-Modelo Signatories, the Option Trust and the Banamex Trust as follows: 4.1. Corporate Power and Authority; Effect of Agreement. Each of A-B, A-BI and the Investor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Each of A-B, A-BI and the Investor has all requisite corporate power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by each of A-B, A-BI and the Investor of its obligations under this Agreement and the consummation by each of A-B, A-BI and the Investor of the transactions contemplated hereby have been duly authorized by the Board of Directors of each of A-B, A-BI and the Investor, and no other corpo- rate action or proceeding on the part of each of A-B, A-BI and the Investor or their stockholders is necessary to authorize this Agreement or the consummation of any of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by each of A-B, A-BI and the Investor and constitutes the valid and binding obligation of each of A-B, A-BI and the Investor, enforceable against each of them in accordance with its terms. The execution, delivery and performance by the each of A-B, A-BI and Investor of this Agreement and the consummation by each of A-B, A-BI and the Investor of the transactions contemplated hereby does not and will not, 30

with or without the giving of notice or the lapse of time, or both, (a) violate any law, rule or regulation to which any of them or any of their respective assets is subject, (b) violate any order, writ, injunction, judg- ment or decree applicable to any of them or any of their respective assets or properties, or (c) conflict with, or result in a breach of or default under, or give rise to any right of termination, cancellation or acceleration under (i) any term or condition of the Certificate of Incorporation or By-Laws of any of them, or (ii) any of the terms, conditions or provisions of any note, bond, mortgage, indenture or material lease, license, agreement or other material instrument to which any of them or any of their respective subsidiaries is a party or by which any of their respective assets may be bound; except, with respect to clauses (a), (b) and (c)(ii) above, for viola- tions, conflicts, breaches or defaults which in the aggregate would not materially hinder or impair their ability to consummate the transactions contemplated hereby. 4.2. Consents. No consent, approval or autho- rization of, or exemption by, or filing with, any govern- mental or regulatory authority (other than as may be required under the HSR Act or the LEC) is required in connection with the execution, delivery and performance by A-B, A-BI or the Investor of the transactions contem- plated by this Agreement. 4.3. Availability of Funds. The Investor has available or will have available on the Closing Date sufficient funds to enable it to consummate the transac- tions contemplated by Article II of this Agreement. 4.4. Management of G-Modelo and the G-Modelo Corporations. Each of A-B, A-BI and the Investor acknowledge that it is its intention and desire, as well as the intention and desire of the Controlling Shareholders, that G-Modelo and the G-Modelo Corporations shall contin- ue to be managed by the Controlling Shareholders, with the participation of A-B, A-BI and the Investor as minor- ity shareholders, as provided for in this Agreement and in the Amended G-Modelo By-laws and the Amended Diblo By- laws; and that this has been an essential and basic condition for the Controlling Shareholders to enter into this Agreement and to create and enter into the asso- ciation or joint venture herein set forth.

with or without the giving of notice or the lapse of time, or both, (a) violate any law, rule or regulation to which any of them or any of their respective assets is subject, (b) violate any order, writ, injunction, judg- ment or decree applicable to any of them or any of their respective assets or properties, or (c) conflict with, or result in a breach of or default under, or give rise to any right of termination, cancellation or acceleration under (i) any term or condition of the Certificate of Incorporation or By-Laws of any of them, or (ii) any of the terms, conditions or provisions of any note, bond, mortgage, indenture or material lease, license, agreement or other material instrument to which any of them or any of their respective subsidiaries is a party or by which any of their respective assets may be bound; except, with respect to clauses (a), (b) and (c)(ii) above, for viola- tions, conflicts, breaches or defaults which in the aggregate would not materially hinder or impair their ability to consummate the transactions contemplated hereby. 4.2. Consents. No consent, approval or autho- rization of, or exemption by, or filing with, any govern- mental or regulatory authority (other than as may be required under the HSR Act or the LEC) is required in connection with the execution, delivery and performance by A-B, A-BI or the Investor of the transactions contem- plated by this Agreement. 4.3. Availability of Funds. The Investor has available or will have available on the Closing Date sufficient funds to enable it to consummate the transac- tions contemplated by Article II of this Agreement. 4.4. Management of G-Modelo and the G-Modelo Corporations. Each of A-B, A-BI and the Investor acknowledge that it is its intention and desire, as well as the intention and desire of the Controlling Shareholders, that G-Modelo and the G-Modelo Corporations shall contin- ue to be managed by the Controlling Shareholders, with the participation of A-B, A-BI and the Investor as minor- ity shareholders, as provided for in this Agreement and in the Amended G-Modelo By-laws and the Amended Diblo By- laws; and that this has been an essential and basic condition for the Controlling Shareholders to enter into this Agreement and to create and enter into the asso- ciation or joint venture herein set forth.

ARTICLE V COVENANTS OF THE PARTIES 5.1. Access to Information. (a) A-B and its authorized representa- tives shall be permitted to review the business activi- ties of G-Modelo and the G-Modelo Corporations as they deem reasonably necessary sufficiently in advance of future investments in G-Modelo and Diblo contemplated by this Agreement. For such purposes and subject to prior consultation with a representative of the Controlling Shareholders, (a) A-B and its authorized representatives shall have access during normal business hours to books, records and properties of G-Modelo and the G-Modelo Corporations and to those employees and financial, legal and other representatives of G-Modelo and the G-Modelo Corporations having knowledge of financial, operating and legal data and other information with respect to the business and properties of G-Modelo and the G-Modelo Corporations as A-B may reasonably request to enable A-B and its authorized representatives to conduct a finan- cial, environmental and legal review of G-Modelo and the G-Modelo Corporations for purposes of determining whether to make further investments in G-Modelo and Diblo; provided, however, that such review shall be subject to prior consultation with and scheduling by representatives of the Controlling Shareholders to ensure that the review will be conducted in such a manner as not to disrupt the operations of G-Modelo and the G-Modelo Corporations. (b) From and after the Closing, A-B, A- BI, the Investor and their authorized representatives (the "A-B Group"), on the one hand, and the Controlling Shareholders and their authorized representatives (the "Controlling Shareholders Group"), on the other hand, agree to treat all information concerning G-Modelo and the G-Modelo Corporations (the "Confidential Informa- tion") as strictly confidential; provided, however, that disclosure of such information may be made by either the A-B Group or the Controlling Shareholders Group (i) with the prior written consent of the non-disclosing group or (ii) if, in the opinion of counsel for the party desiring to make such disclosure, such disclosure is required by law, including, without limitation, in connection with

ARTICLE V COVENANTS OF THE PARTIES 5.1. Access to Information. (a) A-B and its authorized representa- tives shall be permitted to review the business activi- ties of G-Modelo and the G-Modelo Corporations as they deem reasonably necessary sufficiently in advance of future investments in G-Modelo and Diblo contemplated by this Agreement. For such purposes and subject to prior consultation with a representative of the Controlling Shareholders, (a) A-B and its authorized representatives shall have access during normal business hours to books, records and properties of G-Modelo and the G-Modelo Corporations and to those employees and financial, legal and other representatives of G-Modelo and the G-Modelo Corporations having knowledge of financial, operating and legal data and other information with respect to the business and properties of G-Modelo and the G-Modelo Corporations as A-B may reasonably request to enable A-B and its authorized representatives to conduct a finan- cial, environmental and legal review of G-Modelo and the G-Modelo Corporations for purposes of determining whether to make further investments in G-Modelo and Diblo; provided, however, that such review shall be subject to prior consultation with and scheduling by representatives of the Controlling Shareholders to ensure that the review will be conducted in such a manner as not to disrupt the operations of G-Modelo and the G-Modelo Corporations. (b) From and after the Closing, A-B, A- BI, the Investor and their authorized representatives (the "A-B Group"), on the one hand, and the Controlling Shareholders and their authorized representatives (the "Controlling Shareholders Group"), on the other hand, agree to treat all information concerning G-Modelo and the G-Modelo Corporations (the "Confidential Informa- tion") as strictly confidential; provided, however, that disclosure of such information may be made by either the A-B Group or the Controlling Shareholders Group (i) with the prior written consent of the non-disclosing group or (ii) if, in the opinion of counsel for the party desiring to make such disclosure, such disclosure is required by law, including, without limitation, in connection with 32

the public offerings contemplated by Section 5.8. The term "Confidential Information" shall not be deemed to include information which (i) is already in the posses- sion of the A-B Group and which was not disclosed to the A-B Group by the Controlling Shareholders Group or G- Modelo, provided that such information is not known to the A-B Group to be subject to another confidentiality agreement with, or other obligation of secrecy to, GModelo or a G-Modelo Corporation, (ii) is or becomes generally available to the public other than as a result of a disclosure by the A-B Group or the Controlling Shareholders Group in violation of this Section 5.1(b), or (iii) becomes available to either the A-B Group or the Controlling Shareholders Group on a non-confidential basis from a source other than G-Modelo or a G-Modelo Corporation or their respective directors, officers, employees, agents, representatives or advisors, provided that such source is not known by the A-B Group or the Controlling Shareholders Group, respectively, to be bound by a confidentiality agreement with, or other obligation of secrecy to, G-Modelo or a G-Modelo Corporation. 5.2. Further Assurances. Subject to the terms and conditions of this Agreement, A-B, G-Modelo, Diblo and the Controlling Shareholders, in their capacity as shareholders, directors or officers of G-Modelo and Diblo and as members of the technical committees of the Control Trust, the Banamex Trust and the Option Trust (a) will take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advis- able under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement, including without limitation, the transac- tions, rights and obligations under the Amended G-Modelo By-laws, Amended Diblo By-laws, the Control Trust Agree- ment, the Option Trust Agreement and the Banamex Trust Agreement (collectively, the "Ancillary Documents") and to ensure that A-B's, A-BI's and the Investor's rights under this Agreement and the Ancillary Documents continue unimpeded and (b) will take, or cause to be taken, no action inconsistent with the terms of this Agreement and the Ancillary Documents or inconsistent with A-B's, A- BI's or the Investor's rights hereunder or thereunder. In case at any time after the Closing Date any further action is necessary or desirable to carry out the purpos- es of this Agreement or the

the public offerings contemplated by Section 5.8. The term "Confidential Information" shall not be deemed to include information which (i) is already in the posses- sion of the A-B Group and which was not disclosed to the A-B Group by the Controlling Shareholders Group or G- Modelo, provided that such information is not known to the A-B Group to be subject to another confidentiality agreement with, or other obligation of secrecy to, GModelo or a G-Modelo Corporation, (ii) is or becomes generally available to the public other than as a result of a disclosure by the A-B Group or the Controlling Shareholders Group in violation of this Section 5.1(b), or (iii) becomes available to either the A-B Group or the Controlling Shareholders Group on a non-confidential basis from a source other than G-Modelo or a G-Modelo Corporation or their respective directors, officers, employees, agents, representatives or advisors, provided that such source is not known by the A-B Group or the Controlling Shareholders Group, respectively, to be bound by a confidentiality agreement with, or other obligation of secrecy to, G-Modelo or a G-Modelo Corporation. 5.2. Further Assurances. Subject to the terms and conditions of this Agreement, A-B, G-Modelo, Diblo and the Controlling Shareholders, in their capacity as shareholders, directors or officers of G-Modelo and Diblo and as members of the technical committees of the Control Trust, the Banamex Trust and the Option Trust (a) will take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advis- able under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement, including without limitation, the transac- tions, rights and obligations under the Amended G-Modelo By-laws, Amended Diblo By-laws, the Control Trust Agree- ment, the Option Trust Agreement and the Banamex Trust Agreement (collectively, the "Ancillary Documents") and to ensure that A-B's, A-BI's and the Investor's rights under this Agreement and the Ancillary Documents continue unimpeded and (b) will take, or cause to be taken, no action inconsistent with the terms of this Agreement and the Ancillary Documents or inconsistent with A-B's, A- BI's or the Investor's rights hereunder or thereunder. In case at any time after the Closing Date any further action is necessary or desirable to carry out the purpos- es of this Agreement or the Ancillary Documents, (a) A-B will cause its proper officers and directors to take all 33

such necessary action, and (b) the Controlling Sharehold- ers will take or cause the proper officers and directors of G-Modelo or any of the G-Modelo Corporations and the Trustees under the Trust Control, the Banamex Trust and the Option Trust to take all such necessary actions. 5.3. Filings; Tax Returns. (a) If upon the exercise by the Investor of any of the rights provided in Article VI hereof or Clause Eighth and Annex 3 of the Control Trust Agreement to acquire shares of G-Modelo capital stock, 49 percent or more of the total outstanding full voting capital stock of G-Modelo would be held of record by a "Foreign Investor" (as defined in the LRMI), G-Modelo shall give written notice to the Investor (the "Foreign Investor No- tice") within two business days following notice of the Investor's intention to acquire shares, accompanied by a certificate signed by the Secretary of the G-Modelo Board of Directors certifying such ownership and indicating the number of shares which would be owned by Foreign Inves- tors upon the exercise by the Investor of the right to acquire shares. Upon receipt of the Foreign Investor Notice, the Investor may appoint a designated purchaser to acquire such shares. In the event, the Investor determines not to appoint such designated purchaser or following the appointment of such designated purchaser, the Investor and the Controlling Shareholders agree promptly to file or cause to be filed with the Mexican Foreign Investment Commission in accordance with the LRMI all requisite documents and notifications necessary or appropriate in order to obtain the requisite permits for G-Modelo to become a "Foreign Corporation" within the meaning of the LRMI. The parties hereto will coordinate and cooperate with one another in exchanging such infor- mation and provide such reasonable assistance as may be requested in connection with obtaining the required permits as promptly as possible. (b) A-B and G-Modelo agree that they will provide each other with such assistance as may reasonably be requested by either of them in connection with the preparation of any return of Taxes, any audit or other examination by any taxing authority, or any judicial or administrative proceedings relating to liability for Taxes and will provide the other with any records or information relevant to such return, audit or examina34

such necessary action, and (b) the Controlling Sharehold- ers will take or cause the proper officers and directors of G-Modelo or any of the G-Modelo Corporations and the Trustees under the Trust Control, the Banamex Trust and the Option Trust to take all such necessary actions. 5.3. Filings; Tax Returns. (a) If upon the exercise by the Investor of any of the rights provided in Article VI hereof or Clause Eighth and Annex 3 of the Control Trust Agreement to acquire shares of G-Modelo capital stock, 49 percent or more of the total outstanding full voting capital stock of G-Modelo would be held of record by a "Foreign Investor" (as defined in the LRMI), G-Modelo shall give written notice to the Investor (the "Foreign Investor No- tice") within two business days following notice of the Investor's intention to acquire shares, accompanied by a certificate signed by the Secretary of the G-Modelo Board of Directors certifying such ownership and indicating the number of shares which would be owned by Foreign Inves- tors upon the exercise by the Investor of the right to acquire shares. Upon receipt of the Foreign Investor Notice, the Investor may appoint a designated purchaser to acquire such shares. In the event, the Investor determines not to appoint such designated purchaser or following the appointment of such designated purchaser, the Investor and the Controlling Shareholders agree promptly to file or cause to be filed with the Mexican Foreign Investment Commission in accordance with the LRMI all requisite documents and notifications necessary or appropriate in order to obtain the requisite permits for G-Modelo to become a "Foreign Corporation" within the meaning of the LRMI. The parties hereto will coordinate and cooperate with one another in exchanging such infor- mation and provide such reasonable assistance as may be requested in connection with obtaining the required permits as promptly as possible. (b) A-B and G-Modelo agree that they will provide each other with such assistance as may reasonably be requested by either of them in connection with the preparation of any return of Taxes, any audit or other examination by any taxing authority, or any judicial or administrative proceedings relating to liability for Taxes and will provide the other with any records or information relevant to such return, audit or examina34

tion, proceedings or determination as are in their pos- session or subject to their control. Such assistance shall include making employees available on a mutually convenient basis to provide additional information and an explanation of any material provided hereunder and shall include providing copies of any relevant returns of Taxes and any relevant Tax receipts. 5.4. Internal Reorganization. As promptly as practicable following the Closing Date but in no event later than December 31, 1993, the Controlling Sharehold- ers shall cause G-Modelo and the G-Modelo Corporations to effect and carry out a corporate reorganization in accor- dance with the following provisions: (a) all of the issued and outstanding capital stock of Tapas Y Tapones de Zacatecas, S.A de C.V. ("Tapas"), Promotora de Servicios de Zacatecas, S.A. de C.V. ("Promotora"), and Envases de Zacatecas, S.A. de C.V. ("Envases") then owned by Tenedora Cano, S.A. de C.V. shall be transferred to Diblo; (b) El Cubito Fabrica de Hielo, S.A. de C.V. ("Hielo") shall be merged with and into Cerveceria del Pacifico, S.A. de C.V. ("Pacifico"), and as a result of such merger, the separate corporate existence of Hielo shall cease and Pacifico shall continue as the surviving corporation of the merger; (c) G-Modelo will obtain, if necessary, a ruling from the Mexican tax authorities that the transac- tions described in (a) above are tax-free for Mexican income and transfer tax purposes; (d) each of Tecnica Inamex, S.A. de C.V. and Instalaciones Inamex, S.A. de C.V. (collectively, the "Inamex Subsidiaries") shall be merged with and into Inamex de Cervezas y Maltas, S.A. de C.V. ("Inamex"), and as a result of such mergers, the separate corporate existence of the Inamex Subsidiaries shall cease and Inamex shall continue as the surviving corporation of the mergers; (e) Constructora Inamex, S.A. de C.V. shall be liquidated; 35

tion, proceedings or determination as are in their pos- session or subject to their control. Such assistance shall include making employees available on a mutually convenient basis to provide additional information and an explanation of any material provided hereunder and shall include providing copies of any relevant returns of Taxes and any relevant Tax receipts. 5.4. Internal Reorganization. As promptly as practicable following the Closing Date but in no event later than December 31, 1993, the Controlling Sharehold- ers shall cause G-Modelo and the G-Modelo Corporations to effect and carry out a corporate reorganization in accor- dance with the following provisions: (a) all of the issued and outstanding capital stock of Tapas Y Tapones de Zacatecas, S.A de C.V. ("Tapas"), Promotora de Servicios de Zacatecas, S.A. de C.V. ("Promotora"), and Envases de Zacatecas, S.A. de C.V. ("Envases") then owned by Tenedora Cano, S.A. de C.V. shall be transferred to Diblo; (b) El Cubito Fabrica de Hielo, S.A. de C.V. ("Hielo") shall be merged with and into Cerveceria del Pacifico, S.A. de C.V. ("Pacifico"), and as a result of such merger, the separate corporate existence of Hielo shall cease and Pacifico shall continue as the surviving corporation of the merger; (c) G-Modelo will obtain, if necessary, a ruling from the Mexican tax authorities that the transac- tions described in (a) above are tax-free for Mexican income and transfer tax purposes; (d) each of Tecnica Inamex, S.A. de C.V. and Instalaciones Inamex, S.A. de C.V. (collectively, the "Inamex Subsidiaries") shall be merged with and into Inamex de Cervezas y Maltas, S.A. de C.V. ("Inamex"), and as a result of such mergers, the separate corporate existence of the Inamex Subsidiaries shall cease and Inamex shall continue as the surviving corporation of the mergers; (e) Constructora Inamex, S.A. de C.V. shall be liquidated; 35

(f) each of Perifreria, S.A. de C.V., Conorte, S.A. de C.V., Invoccidente, S.A.de C.V., Negopa- cifico, S.A. de C.V., Consureste, S.A. de C.V., Invocari- be, S.A. de C.V., Pro-altiplano, S.A. de C.V., Transnore- ste, S.A. de C.V. or Control Consolidado, S.A. de C.V. (collectively, the "Distribution Companies") shall be reorganized from a Sociedad Anonima de Capital Variable into a Sociedad en Comandita Simple and, in connection with such reorganizations, the Investor shall be issued one interest in each of such Comanditas. A-B shall have the right to approve the governing documents of each of such Comandita, which approval shall not be unreasonably withheld, and such governing documents shall provide that no transfer of a partner's interest in the Comandita and no amendment to the Comandita governing documents shall be permitted without the unanimous consent of each of the partners; (g) following the reorganizations de- scribed in (f) above, all of the Distribution Companies shall be merged into two Distribution Companies, which the Controlling Shareholders presently contemplate will be Control Consolidado and Patentes (as hereinafter defined), and the Investor will receive one interest in each of such Distribution Companies; and (h) G-Modelo and the Controlling Share- holders agree that they will provide A-B with such assis- tance and information as may reasonably be requested by A-B in connection with any filings made by A-B with the United States Internal Revenue Service. 5.5. Election of A-B Director. The Control- ling Shareholders shall be entitled to designate a G-Mod- elo director for election to the A-B Board of Directors. Following such designation, A-B will use its best efforts to nominate and cause such designee to be elected to the A-B Board of Directors at the Annual Meeting of Shareholders of A-B next succeeding such designation and to continue to nominate and cause such a designee to be elected for so long as the Investor owns ten percent or more of the total outstanding shares of G-Modelo capital stock. 5.6. Environmental and Safety Laws. From and after the date hereof, G-Modelo and the G-Modelo Corporations shall conduct their businesses so as to comply in

(f) each of Perifreria, S.A. de C.V., Conorte, S.A. de C.V., Invoccidente, S.A.de C.V., Negopa- cifico, S.A. de C.V., Consureste, S.A. de C.V., Invocari- be, S.A. de C.V., Pro-altiplano, S.A. de C.V., Transnore- ste, S.A. de C.V. or Control Consolidado, S.A. de C.V. (collectively, the "Distribution Companies") shall be reorganized from a Sociedad Anonima de Capital Variable into a Sociedad en Comandita Simple and, in connection with such reorganizations, the Investor shall be issued one interest in each of such Comanditas. A-B shall have the right to approve the governing documents of each of such Comandita, which approval shall not be unreasonably withheld, and such governing documents shall provide that no transfer of a partner's interest in the Comandita and no amendment to the Comandita governing documents shall be permitted without the unanimous consent of each of the partners; (g) following the reorganizations de- scribed in (f) above, all of the Distribution Companies shall be merged into two Distribution Companies, which the Controlling Shareholders presently contemplate will be Control Consolidado and Patentes (as hereinafter defined), and the Investor will receive one interest in each of such Distribution Companies; and (h) G-Modelo and the Controlling Share- holders agree that they will provide A-B with such assis- tance and information as may reasonably be requested by A-B in connection with any filings made by A-B with the United States Internal Revenue Service. 5.5. Election of A-B Director. The Control- ling Shareholders shall be entitled to designate a G-Mod- elo director for election to the A-B Board of Directors. Following such designation, A-B will use its best efforts to nominate and cause such designee to be elected to the A-B Board of Directors at the Annual Meeting of Shareholders of A-B next succeeding such designation and to continue to nominate and cause such a designee to be elected for so long as the Investor owns ten percent or more of the total outstanding shares of G-Modelo capital stock. 5.6. Environmental and Safety Laws. From and after the date hereof, G-Modelo and the G-Modelo Corporations shall conduct their businesses so as to comply in 36

all material respects with all Federal, state and local environmental and health and safety laws and regulations in all jurisdictions in which they are or may at any time be doing business. If G-Modelo or any G-Modelo Corporation shall (a) receive notice that it is the subject of any investigation or threatened investigation by any Federal, state or local government agency regarding the violation or alleged violation of any Federal, state or local environmental or health and safety statute or regulation; or (b) receive notice that any judicial or administrative complaint, proceeding or order has been filed or is about to be filed against G-Modelo or a G- Modelo Corporation alleging violations of any Federal, state or local environmental or health and safety statute or regulation, then G-Modelo or the G-Modelo Corporation shall promptly provide A-B with such notice, and in no event later than within fifteen (15) days from receipt thereby by G-Modelo or the G-Modelo Corporation. 5.7. USA Export Agreement. The Controlling Shareholders agree that the USA Export Agreement shall not be amended without the prior written consent of A-B, which shall not be unreasonably withheld. 5.8. Consummation of Public Offerings; Regis- tration of Shares. (a) The Controlling Shareholders agree to use their best efforts to sell on a widely distributed basis an aggregate of 27,436,722 Series C Shares and to cause G-Modelo to sell an aggregate of 10,161,748 Series C Shares prior to May 31, 1995, of which at least an aggregate of 26,420,548 Series C Shares (such shares representing thirteen percent of the authorized capital stock of G-Modelo) shall be sold in one or more public offerings (the "Offerings") and the remainder of which shall be sold on a widely distributed basis through open- market transactions or otherwise. Prior to filing an application with the Comision Nacional de Valores with respect to any of the Offerings, the Controlling Share- holders and G-Modelo agree to provide the Investor with a copy of such application and all offering materials prepared in connection therewith sufficiently in advance of the proposed filing date to enable the Investor to review and comment on such application. 37

all material respects with all Federal, state and local environmental and health and safety laws and regulations in all jurisdictions in which they are or may at any time be doing business. If G-Modelo or any G-Modelo Corporation shall (a) receive notice that it is the subject of any investigation or threatened investigation by any Federal, state or local government agency regarding the violation or alleged violation of any Federal, state or local environmental or health and safety statute or regulation; or (b) receive notice that any judicial or administrative complaint, proceeding or order has been filed or is about to be filed against G-Modelo or a G- Modelo Corporation alleging violations of any Federal, state or local environmental or health and safety statute or regulation, then G-Modelo or the G-Modelo Corporation shall promptly provide A-B with such notice, and in no event later than within fifteen (15) days from receipt thereby by G-Modelo or the G-Modelo Corporation. 5.7. USA Export Agreement. The Controlling Shareholders agree that the USA Export Agreement shall not be amended without the prior written consent of A-B, which shall not be unreasonably withheld. 5.8. Consummation of Public Offerings; Regis- tration of Shares. (a) The Controlling Shareholders agree to use their best efforts to sell on a widely distributed basis an aggregate of 27,436,722 Series C Shares and to cause G-Modelo to sell an aggregate of 10,161,748 Series C Shares prior to May 31, 1995, of which at least an aggregate of 26,420,548 Series C Shares (such shares representing thirteen percent of the authorized capital stock of G-Modelo) shall be sold in one or more public offerings (the "Offerings") and the remainder of which shall be sold on a widely distributed basis through open- market transactions or otherwise. Prior to filing an application with the Comision Nacional de Valores with respect to any of the Offerings, the Controlling Share- holders and G-Modelo agree to provide the Investor with a copy of such application and all offering materials prepared in connection therewith sufficiently in advance of the proposed filing date to enable the Investor to review and comment on such application. 37

(b) The Controlling Shareholders and G-Modelo agree to use their best efforts to cause the Series C Shares, and at the request of A-B, the Series B Shares to be placed on the Bolsa Mexicana de Valores, S.A. de C.V. (the "Bolsa"). The Controlling Shareholders and G-Modelo shall have the right to cause the Series A Shares to be placed on the Bolsa. 5.9. Dividend Policies. (a) G-Modelo and the Controlling Share- holders, in their capacity as shareholders, directors or officers of GModelo and as members of the technical committees of the Control Trust and the Option Trust agree to take all actions necessary to cause G-Modelo to adopt and to follow, and all such parties agree to adopt and to follow, in accordance with Mexican law, the fol- lowing annual dividend policy on the Series A Shares, Series B Shares, Series C Shares and Series P-C Shares. (i) For the period commencing on the Closing Date and ending at such time as clause (ii) of this paragraph (a) becomes ap- plicable, the per share amount of the annual dividend payable on the outstanding Series A Shares, Series B Shares and Series C Shares will be an amount equal to (A) the greater of (1) 15 percent of G-Modelo's consolidated af- ter-tax net earnings calculated in accordance with Mexican GAAP for the most recently com- pleted calendar year, and (2) 45,109,950 Mexi- can Pesos divided by (B) the aggregate number of Series A Shares, Series B Shares and Series C Shares outstanding on the record date fixed by the shareholders of G-Modelo for the payment of such dividend. (ii) If the Investor purchases all of the Option Shares pursuant to the Op- tion, then for the period commencing January 1, 1998, the per share amount of the annual divi- dend payable on the outstanding Series A Shares, Series B Shares and Series C Shares will be an amount equal to (A) the greater of (1) Consolidated G-Modelo Free Cash Flow (as hereinafter defined) for the most recently completed calendar year, and (2) 45,109,950 38

(b) The Controlling Shareholders and G-Modelo agree to use their best efforts to cause the Series C Shares, and at the request of A-B, the Series B Shares to be placed on the Bolsa Mexicana de Valores, S.A. de C.V. (the "Bolsa"). The Controlling Shareholders and G-Modelo shall have the right to cause the Series A Shares to be placed on the Bolsa. 5.9. Dividend Policies. (a) G-Modelo and the Controlling Share- holders, in their capacity as shareholders, directors or officers of GModelo and as members of the technical committees of the Control Trust and the Option Trust agree to take all actions necessary to cause G-Modelo to adopt and to follow, and all such parties agree to adopt and to follow, in accordance with Mexican law, the fol- lowing annual dividend policy on the Series A Shares, Series B Shares, Series C Shares and Series P-C Shares. (i) For the period commencing on the Closing Date and ending at such time as clause (ii) of this paragraph (a) becomes ap- plicable, the per share amount of the annual dividend payable on the outstanding Series A Shares, Series B Shares and Series C Shares will be an amount equal to (A) the greater of (1) 15 percent of G-Modelo's consolidated af- ter-tax net earnings calculated in accordance with Mexican GAAP for the most recently com- pleted calendar year, and (2) 45,109,950 Mexi- can Pesos divided by (B) the aggregate number of Series A Shares, Series B Shares and Series C Shares outstanding on the record date fixed by the shareholders of G-Modelo for the payment of such dividend. (ii) If the Investor purchases all of the Option Shares pursuant to the Op- tion, then for the period commencing January 1, 1998, the per share amount of the annual divi- dend payable on the outstanding Series A Shares, Series B Shares and Series C Shares will be an amount equal to (A) the greater of (1) Consolidated G-Modelo Free Cash Flow (as hereinafter defined) for the most recently completed calendar year, and (2) 45,109,950 38

Mexican Pesos, divided by (B) the aggregate number of Series A Shares, Series B Shares and Series C Shares outstanding on the record date fixed by the shareholders of G-Modelo for the payment of such dividend. For purposes hereof, "Consolidated G-Modelo Free Cash Flow" shall equal all of the consolidated after-tax net earnings of G-Modelo and its subsidiaries cal- culated in accordance with Mexican GAAP avail- able to holders of Series A Shares, Series B Shares and Series C Shares, (A) plus deprecia- tion and amortization, (B) plus any decrease in non-cash net working capital, (C) plus other expenses which do not require a cash outlay, (D) minus other income which does not provide cash, (E) minus capital expenditures and other asset acquisitions, (F) minus any increase in non-cash net working capital, and (G) minus any principal repayments of indebtedness, all of which shall be determined as shown in the exam- ple contained in Exhibit B hereto. (iii) For the period commencing on the Closing Date and ending on the date the Series P-C Shares are exchanged for Series B Shares, the per share amount of the annual dividend payable on the outstanding PC Shares will be calculated in accordance with the terms of such Series P-C Shares set forth in the Amended GModelo By-laws. (b) The Controlling Shareholders in their capacity as shareholders, directors or officers of Diblo and as members of the technical committee of the Banamex Trust agree to take all actions necessary to cause Diblo to adopt and to follow, and all such parties agree to adopt and to follow, in accordance with Mexican law, the following annual dividend policy on the Diblo capital stock. Commencing on the Closing Date, there shall be declared (i) an annual dividend on the outstanding Diblo P-C Shares in an amount sufficient for G-Modelo to de- clare and pay the annual dividend provided for in para- graph (a)(iii) above; provided, however, upon the ex- change by the Investor of the Series P-C Shares into Series B Shares, the Diblo P-C Shares will be exchanged by G-Modelo effective as of the date of such exchange by the Investor on a share-for-share basis for Diblo Series 39

A Shares and the annual dividend policy set forth in this clause (i) shall terminate, and (ii) an annual dividend on

Mexican Pesos, divided by (B) the aggregate number of Series A Shares, Series B Shares and Series C Shares outstanding on the record date fixed by the shareholders of G-Modelo for the payment of such dividend. For purposes hereof, "Consolidated G-Modelo Free Cash Flow" shall equal all of the consolidated after-tax net earnings of G-Modelo and its subsidiaries cal- culated in accordance with Mexican GAAP avail- able to holders of Series A Shares, Series B Shares and Series C Shares, (A) plus deprecia- tion and amortization, (B) plus any decrease in non-cash net working capital, (C) plus other expenses which do not require a cash outlay, (D) minus other income which does not provide cash, (E) minus capital expenditures and other asset acquisitions, (F) minus any increase in non-cash net working capital, and (G) minus any principal repayments of indebtedness, all of which shall be determined as shown in the exam- ple contained in Exhibit B hereto. (iii) For the period commencing on the Closing Date and ending on the date the Series P-C Shares are exchanged for Series B Shares, the per share amount of the annual dividend payable on the outstanding PC Shares will be calculated in accordance with the terms of such Series P-C Shares set forth in the Amended GModelo By-laws. (b) The Controlling Shareholders in their capacity as shareholders, directors or officers of Diblo and as members of the technical committee of the Banamex Trust agree to take all actions necessary to cause Diblo to adopt and to follow, and all such parties agree to adopt and to follow, in accordance with Mexican law, the following annual dividend policy on the Diblo capital stock. Commencing on the Closing Date, there shall be declared (i) an annual dividend on the outstanding Diblo P-C Shares in an amount sufficient for G-Modelo to de- clare and pay the annual dividend provided for in para- graph (a)(iii) above; provided, however, upon the ex- change by the Investor of the Series P-C Shares into Series B Shares, the Diblo P-C Shares will be exchanged by G-Modelo effective as of the date of such exchange by the Investor on a share-for-share basis for Diblo Series 39

A Shares and the annual dividend policy set forth in this clause (i) shall terminate, and (ii) an annual dividend on the outstanding Diblo Common Shares which shall be payable to all holders of Diblo Common Shares in an amount sufficient for G-Modelo to declare and pay the annual dividend provided for in paragraphs (a)(i) and (a)(ii) above. (c) The Controlling Shareholders in their capacity as shareholders, directors or officers of Diblo and as members of the technical committee of the Banamex Trust agree to take all actions necessary to cause the G- Modelo Corporations to declare annual dividends in an amount which, in the aggregate, are sufficient to enable G-Modelo and Diblo to declare and pay the dividends provided for in paragraphs (a) and (b) above, respective- ly. (d) Subject to the applicable require- ments of Mexican law, the Amended G-Modelo By-laws and the Amended Diblo By-Laws, each of G-Modelo in the case of paragraph (a) above, and Diblo in the case of paragraph (b) above, will declare the annual common dividend following shareholder approval at a shareholders meeting to be held on or prior to April 30, of each year. Sub- ject to the applicable requirements of Mexican law (in- cluding applicable regulations of the Bolsa for any shares listed thereon), the Amended G-Modelo By-laws and the Amended Diblo By-laws, the common dividend shall be payable to shareholders of record on the date of the shareholders meeting and shall be paid on or prior to the fifth day following the declaration date. (e) Notwithstanding the provisions of this Section 5.9, A-B and the Controlling Shareholders agree to consider prior to the declaration of annual dividends on the Series A Shares, the Series B Shares and the Series C Shares the effect such dividends will have on the business, operations and best interests of G- Modelo and the GModelo Corporations, including, if applicable, taking into account the purchase by G-Modelo of the Banamex Put Shares (as defined in Section 5.16) pursuant to Section 5.16. 40 5.10. Equity Participations. (a) At all times after the date of this Agreement, (i) Diblo shall own at least 99.9854 percent of Patentes y Marcas para Promocion de Exportaciones, S.A. de C.V., a Mexican corporation, or its successor ("Patentes"), (ii) Patentes shall own no less than 80 percent of the outstanding capital stock of Procermex and

A Shares and the annual dividend policy set forth in this clause (i) shall terminate, and (ii) an annual dividend on the outstanding Diblo Common Shares which shall be payable to all holders of Diblo Common Shares in an amount sufficient for G-Modelo to declare and pay the annual dividend provided for in paragraphs (a)(i) and (a)(ii) above. (c) The Controlling Shareholders in their capacity as shareholders, directors or officers of Diblo and as members of the technical committee of the Banamex Trust agree to take all actions necessary to cause the G- Modelo Corporations to declare annual dividends in an amount which, in the aggregate, are sufficient to enable G-Modelo and Diblo to declare and pay the dividends provided for in paragraphs (a) and (b) above, respective- ly. (d) Subject to the applicable require- ments of Mexican law, the Amended G-Modelo By-laws and the Amended Diblo By-Laws, each of G-Modelo in the case of paragraph (a) above, and Diblo in the case of paragraph (b) above, will declare the annual common dividend following shareholder approval at a shareholders meeting to be held on or prior to April 30, of each year. Sub- ject to the applicable requirements of Mexican law (in- cluding applicable regulations of the Bolsa for any shares listed thereon), the Amended G-Modelo By-laws and the Amended Diblo By-laws, the common dividend shall be payable to shareholders of record on the date of the shareholders meeting and shall be paid on or prior to the fifth day following the declaration date. (e) Notwithstanding the provisions of this Section 5.9, A-B and the Controlling Shareholders agree to consider prior to the declaration of annual dividends on the Series A Shares, the Series B Shares and the Series C Shares the effect such dividends will have on the business, operations and best interests of G- Modelo and the GModelo Corporations, including, if applicable, taking into account the purchase by G-Modelo of the Banamex Put Shares (as defined in Section 5.16) pursuant to Section 5.16. 40 5.10. Equity Participations. (a) At all times after the date of this Agreement, (i) Diblo shall own at least 99.9854 percent of Patentes y Marcas para Promocion de Exportaciones, S.A. de C.V., a Mexican corporation, or its successor ("Patentes"), (ii) Patentes shall own no less than 80 percent of the outstanding capital stock of Procermex and (iii) Procermex shall own not less than 80 percent and 80 percent, respectively, of the outstanding capital stock of Eurocermex and Iberocermex. (b) At all times after the date of this Agreement, Diblo shall own no less than 41.051 percent, 7.1641 percent and 26.30 percent, respectively, of the outstanding capital stock of Direccion de Fabricas, S.A. de C.V. ("Difa"), Gondi, S.A. de C.V. ("Gondi"), and Extractos y Maltas, S.A. de C.V. ("Extractos"), each of which is a Mexican corporation. 5.11. Operation of G-Modelo. Except as other- wise provided for in this Agreement, the Controlling Shareholders and G-Modelo agree that following the Clos- ing Date and for so long as the Investor owns at least 10 percent of the shares of capital stock of G-Modelo and at least 10 percent of the shares of capital stock of Diblo, (i) the only assets of G-Modelo will be 169,701,202 Diblo Series A Shares, 17,030,940 Diblo P-C Shares, cash, mar- ketable securities and the proceeds received by G-Modelo from the Offerings pursuant to Section 5.8 and the sale of Series C Shares to G-Modelo's executive employees pursuant to Section 5.13; (ii) G-Modelo will incur no liabilities other than liabilities expressly permitted and incurred in connection with the transactions contem- plated by this Agreement; and (iii) G-Modelo will conduct no business or operations except in connection with the transactions contemplated by this Agreement and except for investing activities with respect to the cash and marketable securities owned by it. 5.12. Government Officials. From and after the date hereof, G-Modelo and the G-Modelo Corporations have the continued intention to cause their officers and employees to conduct their businesses so as to comply in all material respects with all Federal, state and local Mexican laws, including those concerning payments of money or other things of value to government officials 41

5.10. Equity Participations. (a) At all times after the date of this Agreement, (i) Diblo shall own at least 99.9854 percent of Patentes y Marcas para Promocion de Exportaciones, S.A. de C.V., a Mexican corporation, or its successor ("Patentes"), (ii) Patentes shall own no less than 80 percent of the outstanding capital stock of Procermex and (iii) Procermex shall own not less than 80 percent and 80 percent, respectively, of the outstanding capital stock of Eurocermex and Iberocermex. (b) At all times after the date of this Agreement, Diblo shall own no less than 41.051 percent, 7.1641 percent and 26.30 percent, respectively, of the outstanding capital stock of Direccion de Fabricas, S.A. de C.V. ("Difa"), Gondi, S.A. de C.V. ("Gondi"), and Extractos y Maltas, S.A. de C.V. ("Extractos"), each of which is a Mexican corporation. 5.11. Operation of G-Modelo. Except as other- wise provided for in this Agreement, the Controlling Shareholders and G-Modelo agree that following the Clos- ing Date and for so long as the Investor owns at least 10 percent of the shares of capital stock of G-Modelo and at least 10 percent of the shares of capital stock of Diblo, (i) the only assets of G-Modelo will be 169,701,202 Diblo Series A Shares, 17,030,940 Diblo P-C Shares, cash, mar- ketable securities and the proceeds received by G-Modelo from the Offerings pursuant to Section 5.8 and the sale of Series C Shares to G-Modelo's executive employees pursuant to Section 5.13; (ii) G-Modelo will incur no liabilities other than liabilities expressly permitted and incurred in connection with the transactions contem- plated by this Agreement; and (iii) G-Modelo will conduct no business or operations except in connection with the transactions contemplated by this Agreement and except for investing activities with respect to the cash and marketable securities owned by it. 5.12. Government Officials. From and after the date hereof, G-Modelo and the G-Modelo Corporations have the continued intention to cause their officers and employees to conduct their businesses so as to comply in all material respects with all Federal, state and local Mexican laws, including those concerning payments of money or other things of value to government officials 41

and to refrain from making or authorizing an offer or payment of money or other thing of value, directly or indirectly, (a) to or for the benefit of a government official in order to obtain the wrongful performance or omission of any acts related to the duties of such gov- ernment official, or (b) to a political party or candi- date when such contributions are not made in the form and within the limits permitted by Mexican law so as to wrongfully influence any official act or decision or to wrongfully induce such party or candidate to wrongfully use its or his influence with the government to affect or influence any act or decision of government. 5.13. Sale of Series C Shares to Employees. G-Modelo shall have the right to offer for subscription up to 3,048,525 Series C Shares from its treasury to certain executive employees of the G-Modelo Corporations (other than the Controlling Shareholders), or to a trust for their benefit, pursuant to the terms of an employee stock purchase plan to be adopted following the Closing. G-Modelo agrees to consult with A-B in connection with the creation and implementation of such plan to ensure that the plan will not result in compensation expense under U.S. GAAP. 5.14. Real Estate Transfers. As soon as prac- ticable following the Closing, the Controlling Sharehold- ers agree to take all action necessary to cause G-Modelo, and G-Modelo agrees, to transfer all of the outstanding shares of capital stock of Distribuidora Pacifico y Modelo de Tepic, S.A. de C.V. and Distribuidora Pacifico y Modelo de La Paz, S.A. de C.V. to a trust to be estab- lished under a trust agreement for the benefit of one or both of Control Consolidado or Patentes. 5.15. Technical Committees. Following the Closing Date, the Controlling Shareholders will take all actions necessary to ensure that a majority of the mem- bers of the technical committees of the Control Trust, the Option Trust and the Banamex Trust are Controlling Shareholders. 5.16. Failure by the Investor to Acquire all Diblo Option Shares. In the event that the Investor does not acquire all of the Diblo Option Shares (as such term is defined in Section 6.4) pursuant to Section 6.4, the Controlling

and to refrain from making or authorizing an offer or payment of money or other thing of value, directly or indirectly, (a) to or for the benefit of a government official in order to obtain the wrongful performance or omission of any acts related to the duties of such gov- ernment official, or (b) to a political party or candi- date when such contributions are not made in the form and within the limits permitted by Mexican law so as to wrongfully influence any official act or decision or to wrongfully induce such party or candidate to wrongfully use its or his influence with the government to affect or influence any act or decision of government. 5.13. Sale of Series C Shares to Employees. G-Modelo shall have the right to offer for subscription up to 3,048,525 Series C Shares from its treasury to certain executive employees of the G-Modelo Corporations (other than the Controlling Shareholders), or to a trust for their benefit, pursuant to the terms of an employee stock purchase plan to be adopted following the Closing. G-Modelo agrees to consult with A-B in connection with the creation and implementation of such plan to ensure that the plan will not result in compensation expense under U.S. GAAP. 5.14. Real Estate Transfers. As soon as prac- ticable following the Closing, the Controlling Sharehold- ers agree to take all action necessary to cause G-Modelo, and G-Modelo agrees, to transfer all of the outstanding shares of capital stock of Distribuidora Pacifico y Modelo de Tepic, S.A. de C.V. and Distribuidora Pacifico y Modelo de La Paz, S.A. de C.V. to a trust to be estab- lished under a trust agreement for the benefit of one or both of Control Consolidado or Patentes. 5.15. Technical Committees. Following the Closing Date, the Controlling Shareholders will take all actions necessary to ensure that a majority of the mem- bers of the technical committees of the Control Trust, the Option Trust and the Banamex Trust are Controlling Shareholders. 5.16. Failure by the Investor to Acquire all Diblo Option Shares. In the event that the Investor does not acquire all of the Diblo Option Shares (as such term is defined in Section 6.4) pursuant to Section 6.4, the Controlling Shareholders shall have the right, at their sole election, at any time during the three year period following the expiration of the Investor's right to acquire such Diblo Option Shares pursuant to the Diblo Option (as such term is defined in Section 6.4) either (a) to require that G-Modelo purchase all of the Diblo Common Shares then held by the Banamex Trust (the "Banam- ex Put Shares"), such right being exercisable at any time or from time to time, in whole or in part, or (b) to merge Diblo and G-Modelo with the result that each out- standing Diblo Common Share held by the Banamex Trust or the Investor shall be converted into a number of shares of full voting common stock of G-Modelo reflecting the fair market value thereof (with Series A Shares being issued to the Controlling Shareholders and Series B Shares being issued to the Investor); provided, however, (i) that no such merger shall be effected unless A-B has agreed that the merger would not have any significant adverse financial, accounting or tax consequences for A-B, and (ii) if such merger is effected, the shares issued to the Controlling Shareholders would not be Restricted Shares (as hereinafter defined) subject to Article VI of this Agreement. If the merger of Diblo and G-Modelo is prohibited by the immediately preceding clause, the parties shall work together to achieve a mutually accept- able transaction structure which would achieve the Con- trolling Shareholders' objectives. In the event that the Controlling Shareholders elect to require G-Modelo to purchase the Banamex Put Shares pursuant to clause (a) above, the Controlling Shareholders shall deliver a written notice (the "Banamex Put Notice") to G-Modelo and the Investor in accordance with Section 13.10 indicating (1) the number of Banamex Put Shares, (2) the Banamex Put Price Per Share (as hereinafter defined), and (3) the date and time fixed for the consummation of such sale. The purchase price per share for the Banamex Put Shares (the "Banamex Put Price Per Share") shall be calculated in the same manner and subject to the same limitations and restrictions as the Diblo Option Price Per Share provided for in Section 6.4(a)(including the limitations and restrictions set forth in the two provisory clauses in the third sentence of Section 6.3(a)) except that (i) 43

all references in Section 6.3(a) to the Option Exercise Notice shall mean the Banamex Put Notice, and (ii) the Adjusted G-Modelo Per Share Earnings shall be calculated during the most recently completed four quarters prior to the date of the Banamex Put Notice. ARTICLE VI

5.16. Failure by the Investor to Acquire all Diblo Option Shares. In the event that the Investor does not acquire all of the Diblo Option Shares (as such term is defined in Section 6.4) pursuant to Section 6.4, the Controlling Shareholders shall have the right, at their sole election, at any time during the three year period following the expiration of the Investor's right to acquire such Diblo Option Shares pursuant to the Diblo Option (as such term is defined in Section 6.4) either (a) to require that G-Modelo purchase all of the Diblo Common Shares then held by the Banamex Trust (the "Banam- ex Put Shares"), such right being exercisable at any time or from time to time, in whole or in part, or (b) to merge Diblo and G-Modelo with the result that each out- standing Diblo Common Share held by the Banamex Trust or the Investor shall be converted into a number of shares of full voting common stock of G-Modelo reflecting the fair market value thereof (with Series A Shares being issued to the Controlling Shareholders and Series B Shares being issued to the Investor); provided, however, (i) that no such merger shall be effected unless A-B has agreed that the merger would not have any significant adverse financial, accounting or tax consequences for A-B, and (ii) if such merger is effected, the shares issued to the Controlling Shareholders would not be Restricted Shares (as hereinafter defined) subject to Article VI of this Agreement. If the merger of Diblo and G-Modelo is prohibited by the immediately preceding clause, the parties shall work together to achieve a mutually accept- able transaction structure which would achieve the Con- trolling Shareholders' objectives. In the event that the Controlling Shareholders elect to require G-Modelo to purchase the Banamex Put Shares pursuant to clause (a) above, the Controlling Shareholders shall deliver a written notice (the "Banamex Put Notice") to G-Modelo and the Investor in accordance with Section 13.10 indicating (1) the number of Banamex Put Shares, (2) the Banamex Put Price Per Share (as hereinafter defined), and (3) the date and time fixed for the consummation of such sale. The purchase price per share for the Banamex Put Shares (the "Banamex Put Price Per Share") shall be calculated in the same manner and subject to the same limitations and restrictions as the Diblo Option Price Per Share provided for in Section 6.4(a)(including the limitations and restrictions set forth in the two provisory clauses in the third sentence of Section 6.3(a)) except that (i) 43

all references in Section 6.3(a) to the Option Exercise Notice shall mean the Banamex Put Notice, and (ii) the Adjusted G-Modelo Per Share Earnings shall be calculated during the most recently completed four quarters prior to the date of the Banamex Put Notice. ARTICLE VI TRANSFER, SALE AND PURCHASE RIGHTS 6.1. General. Subject to the rights and obligations of the Controlling Shareholders with respect to their Trust Rights in the Entrusted Shares (as such terms are defined in the Control Trust Agreement) pursu- ant to the Control Trust Agreement, none of the Control- ling Shareholders, the Trustee on behalf of the Control Trust, the Trustee on behalf of the Option Trust, the Trustee on behalf of the Banamex Trust or the Investor shall sell, convey, assign, transfer, deliver, mortgage, pledge, encumber or otherwise dispose (a "Disposition" or when used as a verb, "Dispose") of any Series A Shares (except for an aggregate of 27,436,722 Series C Shares to be sold by the Controlling Shareholders on a widely distributed basis in accordance with Section 5.8), Series B Shares, Series P-C Shares or Diblo Common Shares (col- lectively, the "Restricted Shares") held by such party except as provided in this Agreement, the Control Trust Agreement, the Option Trust Agreement and the Banamex Trust Agreement; provided, however, that until such time as the Series C Shares are sold to the public in accor- dance with Section 5.8, they shall be deemed to be Re- stricted Shares for purposes of this Agreement. Any attempted Disposition in violation hereof shall be null and void. Notwithstanding the foregoing, any party may make a Disposition of Restricted Shares, whether voluntarily or involuntarily, directly or indirectly, pursuant to (a) any transfer of legal title to the Restricted Shares resulting from the resignation, removal or change of a trustee holding Restricted Shares for the benefit of another, (b) any distribution of Restricted Shares from an estate or trust to any beneficiary thereof, (c) any transfer of Restricted Shares to such party's spouse, child, grandchild, brother, uncle, aunt, nephew, adopted child, great-grandchild or parent, (d) any transfer of Restricted Shares to a trust for the benefit of any person described in clause (c), a Controlling Sharehold44

all references in Section 6.3(a) to the Option Exercise Notice shall mean the Banamex Put Notice, and (ii) the Adjusted G-Modelo Per Share Earnings shall be calculated during the most recently completed four quarters prior to the date of the Banamex Put Notice. ARTICLE VI TRANSFER, SALE AND PURCHASE RIGHTS 6.1. General. Subject to the rights and obligations of the Controlling Shareholders with respect to their Trust Rights in the Entrusted Shares (as such terms are defined in the Control Trust Agreement) pursu- ant to the Control Trust Agreement, none of the Control- ling Shareholders, the Trustee on behalf of the Control Trust, the Trustee on behalf of the Option Trust, the Trustee on behalf of the Banamex Trust or the Investor shall sell, convey, assign, transfer, deliver, mortgage, pledge, encumber or otherwise dispose (a "Disposition" or when used as a verb, "Dispose") of any Series A Shares (except for an aggregate of 27,436,722 Series C Shares to be sold by the Controlling Shareholders on a widely distributed basis in accordance with Section 5.8), Series B Shares, Series P-C Shares or Diblo Common Shares (col- lectively, the "Restricted Shares") held by such party except as provided in this Agreement, the Control Trust Agreement, the Option Trust Agreement and the Banamex Trust Agreement; provided, however, that until such time as the Series C Shares are sold to the public in accor- dance with Section 5.8, they shall be deemed to be Re- stricted Shares for purposes of this Agreement. Any attempted Disposition in violation hereof shall be null and void. Notwithstanding the foregoing, any party may make a Disposition of Restricted Shares, whether voluntarily or involuntarily, directly or indirectly, pursuant to (a) any transfer of legal title to the Restricted Shares resulting from the resignation, removal or change of a trustee holding Restricted Shares for the benefit of another, (b) any distribution of Restricted Shares from an estate or trust to any beneficiary thereof, (c) any transfer of Restricted Shares to such party's spouse, child, grandchild, brother, uncle, aunt, nephew, adopted child, great-grandchild or parent, (d) any transfer of Restricted Shares to a trust for the benefit of any person described in clause (c), a Controlling Sharehold44

er, charitable institution or other trust created to pursue philanthropic purposes for the benefit of third parties not affiliated with a beer company (other than G- Modelo or A-B), or (e) any transfer of Restricted Shares to a partnership or corporation controlling, controlled by or under the common control with one or more of the GModelo Signatories, and only if, in each case under clauses (a) through (e) above, (i) the recipient of such Restricted Shares agrees in writing to be bound by the terms and conditions of this Agreement in which event, for purposes of this Agreement, such recipient shall be deemed to be a (1) "Controlling Shareholder" if the disposing party was a Controlling Shareholder, the Trust- ee of the Control Trust, the Trustee of the Option Trust or the Trustee of the Banamex Trust if the Disposition was effected by a substitution of Trustee of such Trust or (2) the Investor if the disposing party was the Inves- tor, and (ii) in the case of any Disposition by a party other than the Investor, the Investor receives reasonable notice of such Disposition, a copy of the recipient's written agreement required by clause (i) above, and copies of any related instruments effecting a substitu- tion of the trustee pursuant to clause (a) above, creat- ing a trust pursuant to clause (d) above or evidencing control of the corporation or partnership to which a Disposition was made pursuant to clause (e) above, and (iii) in the case of any Disposition by the Investor, the Controlling Shareholders receive reasonable advance notice of such Disposition, a copy of the recipient's written agreement required by clause (i) above, and copies of any related instruments creating a trust pursu- ant to clause (d) above, effecting a substitution of the trustee pursuant to clause (a) above or evidencing A-B's control of the corporation or partnership to which a Disposition was made pursuant to clause (e) above. 6.2. Offer to Sell; Right of First Refusal. (a) In the event that the Investor de- sires to make a Disposition at any time of any of Re- stricted Shares (other than the Series P-C Shares) then owned by it (other than a Disposition permitted by Sec- tion 6.1), the Investor shall first submit a written offer (the "Offering Notice") of such shares to each of the Controlling Shareholders (each of such parties, an "Offeree") in accordance with Section 13.10 specifying 45

er, charitable institution or other trust created to pursue philanthropic purposes for the benefit of third parties not affiliated with a beer company (other than G- Modelo or A-B), or (e) any transfer of Restricted Shares to a partnership or corporation controlling, controlled by or under the common control with one or more of the GModelo Signatories, and only if, in each case under clauses (a) through (e) above, (i) the recipient of such Restricted Shares agrees in writing to be bound by the terms and conditions of this Agreement in which event, for purposes of this Agreement, such recipient shall be deemed to be a (1) "Controlling Shareholder" if the disposing party was a Controlling Shareholder, the Trust- ee of the Control Trust, the Trustee of the Option Trust or the Trustee of the Banamex Trust if the Disposition was effected by a substitution of Trustee of such Trust or (2) the Investor if the disposing party was the Inves- tor, and (ii) in the case of any Disposition by a party other than the Investor, the Investor receives reasonable notice of such Disposition, a copy of the recipient's written agreement required by clause (i) above, and copies of any related instruments effecting a substitu- tion of the trustee pursuant to clause (a) above, creat- ing a trust pursuant to clause (d) above or evidencing control of the corporation or partnership to which a Disposition was made pursuant to clause (e) above, and (iii) in the case of any Disposition by the Investor, the Controlling Shareholders receive reasonable advance notice of such Disposition, a copy of the recipient's written agreement required by clause (i) above, and copies of any related instruments creating a trust pursu- ant to clause (d) above, effecting a substitution of the trustee pursuant to clause (a) above or evidencing A-B's control of the corporation or partnership to which a Disposition was made pursuant to clause (e) above. 6.2. Offer to Sell; Right of First Refusal. (a) In the event that the Investor de- sires to make a Disposition at any time of any of Re- stricted Shares (other than the Series P-C Shares) then owned by it (other than a Disposition permitted by Sec- tion 6.1), the Investor shall first submit a written offer (the "Offering Notice") of such shares to each of the Controlling Shareholders (each of such parties, an "Offeree") in accordance with Section 13.10 specifying 45

the number of Restricted Shares being offered for sale (the "Offered Shares"). (b) Within five business days after receipt of an Offering Notice, each Offeree shall give a written notice (a "Response Notice") to the Investor informing the Investor as to whether it desires to nego- tiate the purchase of the Offered Shares, which Response Notice shall specify the number of Offered Shares each such Offeree desires to purchase. Upon receipt of affirmative Response Notice(s) for all of the Offered Shares, the Investor and Offeree(s) shall promptly nego- tiate in good faith the terms governing such purchase. In the event the Offeree(s) delivering Response Notices do not intend, in the aggregate, to negotiate the pur- chase of all of the Offered Shares, the Investor shall determine whether to negotiate the sale of the aggregate number of Offered Shares proposed to be purchased in such Response Notices. If (i) the Investor determines to sell such lesser number of Offered Shares, then the Investor and the Offeree(s) delivering affirmative Response Notic- es shall promptly negotiate in good faith the terms governing such purchase, or (ii) the Investor determines to attempt to sell all Offered Shares, then the Investor shall give a written notice (a "Second Offering Notice") within five business days after receipt of the Response Notices to each Offeree who delivered an affirmative Response Notice (a "Purchasing Offeree") setting forth the names of, and number of Offered Shares to be pur- chased by, each Purchasing Offeree and the number of Offered Shares remaining offered for purchase. Within five business days after receipt of a Second Offering Notice, the Purchasing Offerees shall determine whether they will negotiate the purchase of all Offered Shares and give the Investor written notice of such determina- tion (a "Second Response Notice"). If the Purchasing Offerees, in the aggregate, determine to negotiate the purchase of all Offered Shares, the Investor and the Pur- chasing Offerees shall promptly negotiate in good faith the terms governing such purchase. (c) In the event that (i) the parties cannot in good faith reach agreement upon the terms of said purchase of Offered Shares within thirty days fol- lowing the date of the Response Notice or the Second Response Notice, as the case may be, or (ii) the Investor makes the determination provided in paragraph (b)(ii) and 46

the number of Restricted Shares being offered for sale (the "Offered Shares"). (b) Within five business days after receipt of an Offering Notice, each Offeree shall give a written notice (a "Response Notice") to the Investor informing the Investor as to whether it desires to nego- tiate the purchase of the Offered Shares, which Response Notice shall specify the number of Offered Shares each such Offeree desires to purchase. Upon receipt of affirmative Response Notice(s) for all of the Offered Shares, the Investor and Offeree(s) shall promptly nego- tiate in good faith the terms governing such purchase. In the event the Offeree(s) delivering Response Notices do not intend, in the aggregate, to negotiate the pur- chase of all of the Offered Shares, the Investor shall determine whether to negotiate the sale of the aggregate number of Offered Shares proposed to be purchased in such Response Notices. If (i) the Investor determines to sell such lesser number of Offered Shares, then the Investor and the Offeree(s) delivering affirmative Response Notic- es shall promptly negotiate in good faith the terms governing such purchase, or (ii) the Investor determines to attempt to sell all Offered Shares, then the Investor shall give a written notice (a "Second Offering Notice") within five business days after receipt of the Response Notices to each Offeree who delivered an affirmative Response Notice (a "Purchasing Offeree") setting forth the names of, and number of Offered Shares to be pur- chased by, each Purchasing Offeree and the number of Offered Shares remaining offered for purchase. Within five business days after receipt of a Second Offering Notice, the Purchasing Offerees shall determine whether they will negotiate the purchase of all Offered Shares and give the Investor written notice of such determina- tion (a "Second Response Notice"). If the Purchasing Offerees, in the aggregate, determine to negotiate the purchase of all Offered Shares, the Investor and the Pur- chasing Offerees shall promptly negotiate in good faith the terms governing such purchase. (c) In the event that (i) the parties cannot in good faith reach agreement upon the terms of said purchase of Offered Shares within thirty days fol- lowing the date of the Response Notice or the Second Response Notice, as the case may be, or (ii) the Investor makes the determination provided in paragraph (b)(ii) and 46

the Purchasing Offerees, in the aggregate, decline to negotiate the purchase of all of the Offered Shares, then the Investor shall have the right to negotiate the sale of the Offered Shares to a third party (a "Third Party Purchaser") for cash. (d) If the Investor receives a bona fide cash offer from a Third Party Purchaser (a "Third Party Offer") to purchase all of such Offered Shares which the Investor wishes to accept, the Investor shall cause the Third Party Offer to be reduced to writing and shall submit a written notice of such Third Party Offer (a "Third Party Offer Notice") to each of the Purchasing Offerees specifying (i) the names of all Purchasing Offerees receiving the Third Party Offer Notice, (ii) the number of Offered Shares, (iii) the proposed cash pur- chase price (the "Third Party Offer Price"), (iv) the name and address of the Third Party Purchaser, and (v) all other material terms of the proposed Disposition, including the proposed method of cash payment. The Third Party Offer Notice shall set forth the Investor's irrevo- cable offer to sell the Offered Shares to the Purchasing Offerees at the price and upon the terms stated in the Third Party Offer Notice. (e) Within ten business days after re- ceipt of a Third Party Offer Notice, the Purchasing Offerees receiving a Third Party Offer Notice shall give written notice (a "Third Party Offer Response Notice") to the Investor as to whether they elect to purchase all, but not less than all, of the Offered Shares upon the terms and conditions set forth in the Third Party Offer Notice. Any affirmative Third Party Offer Response Notice shall specify a date and time for the closing of the purchase (the "Purchase Right Closing"), which date shall not be less than ten nor more than forty days after the date of such affirmative Third Party Response Notice. The Purchase Right Closing shall take place at such location as the parties may mutually agree upon, and the purchase price per share to be paid by a Purchasing Offeree for the purchase of Offered Shares pursuant to this Section 6.2(e) shall be equal to the Third Party Offer Price per share and shall be paid in the manner proposed in the Third Party Offer Notice. (f) If the Offered Shares are not pur- chased by the Purchasing Offerees, the Investor may make 47

the Purchasing Offerees, in the aggregate, decline to negotiate the purchase of all of the Offered Shares, then the Investor shall have the right to negotiate the sale of the Offered Shares to a third party (a "Third Party Purchaser") for cash. (d) If the Investor receives a bona fide cash offer from a Third Party Purchaser (a "Third Party Offer") to purchase all of such Offered Shares which the Investor wishes to accept, the Investor shall cause the Third Party Offer to be reduced to writing and shall submit a written notice of such Third Party Offer (a "Third Party Offer Notice") to each of the Purchasing Offerees specifying (i) the names of all Purchasing Offerees receiving the Third Party Offer Notice, (ii) the number of Offered Shares, (iii) the proposed cash pur- chase price (the "Third Party Offer Price"), (iv) the name and address of the Third Party Purchaser, and (v) all other material terms of the proposed Disposition, including the proposed method of cash payment. The Third Party Offer Notice shall set forth the Investor's irrevo- cable offer to sell the Offered Shares to the Purchasing Offerees at the price and upon the terms stated in the Third Party Offer Notice. (e) Within ten business days after re- ceipt of a Third Party Offer Notice, the Purchasing Offerees receiving a Third Party Offer Notice shall give written notice (a "Third Party Offer Response Notice") to the Investor as to whether they elect to purchase all, but not less than all, of the Offered Shares upon the terms and conditions set forth in the Third Party Offer Notice. Any affirmative Third Party Offer Response Notice shall specify a date and time for the closing of the purchase (the "Purchase Right Closing"), which date shall not be less than ten nor more than forty days after the date of such affirmative Third Party Response Notice. The Purchase Right Closing shall take place at such location as the parties may mutually agree upon, and the purchase price per share to be paid by a Purchasing Offeree for the purchase of Offered Shares pursuant to this Section 6.2(e) shall be equal to the Third Party Offer Price per share and shall be paid in the manner proposed in the Third Party Offer Notice. (f) If the Offered Shares are not pur- chased by the Purchasing Offerees, the Investor may make 47

a Disposition of the Offered Shares to the Third Party Purchaser named in the Third Party Offer Notice but only in strict compliance with the terms stated therein or on terms more favorable to the Investor, and thereafter the Offered Shares in the hands of the Third Party Purchaser shall not be subject to the provisions of this Agreement. If the Investor shall fail to complete such Disposition to the Third Party Purchaser within ninety days following the receipt of the Third Party Offer Response Notice, the Investor shall be required to submit another Offering Notice pursuant to Section 6.2(a) in order to Dispose of any of its Restricted Shares. (g) In the event that the Purchasing Offerees indicate their willingness to purchase, when aggregated, a number of Restricted Shares greater than the number of the Offered Shares, the Offered Shares shall be allocated among the Purchasing Offerees in proportion to their respective percentage ownerships of G-Modelo capital stock. (h) Any failure by the Controlling Share- holders to deliver a Response Notice, a Second Response Notice or a Third Party Offer Response Notice within the required time period shall be deemed an irrevocable election not to purchase the Offered Shares. (i) Subject to the rights of first refus- al among the Controlling Shareholders set forth in the Control Trust Agreement, the Investor shall have rights identical to those set forth in paragraphs (a) through (h) above with respect to all of the Restricted Shares owned by the Controlling Shareholders or the Control Trust, which rights shall be provided for in the Control Trust Agreement, but shall, for purposes of this Agreement, be deemed to be set forth herein as if fully set forth in haec verba. Notwithstanding the foregoing and as provided in the Control Trust Agreement, in the event the Investor does not exercise the Option on or before December 31, 1997 in full and purchase 51,052,626 Series B Shares pursuant to Section 6.3, the Investor's rights of first refusal shall terminate and be of no further force and effect as of December 31, 1997 (or such later date as provided in the Control Trust Agreement). 48 6.3. The Investor's Option to Purchase Shares

a Disposition of the Offered Shares to the Third Party Purchaser named in the Third Party Offer Notice but only in strict compliance with the terms stated therein or on terms more favorable to the Investor, and thereafter the Offered Shares in the hands of the Third Party Purchaser shall not be subject to the provisions of this Agreement. If the Investor shall fail to complete such Disposition to the Third Party Purchaser within ninety days following the receipt of the Third Party Offer Response Notice, the Investor shall be required to submit another Offering Notice pursuant to Section 6.2(a) in order to Dispose of any of its Restricted Shares. (g) In the event that the Purchasing Offerees indicate their willingness to purchase, when aggregated, a number of Restricted Shares greater than the number of the Offered Shares, the Offered Shares shall be allocated among the Purchasing Offerees in proportion to their respective percentage ownerships of G-Modelo capital stock. (h) Any failure by the Controlling Share- holders to deliver a Response Notice, a Second Response Notice or a Third Party Offer Response Notice within the required time period shall be deemed an irrevocable election not to purchase the Offered Shares. (i) Subject to the rights of first refus- al among the Controlling Shareholders set forth in the Control Trust Agreement, the Investor shall have rights identical to those set forth in paragraphs (a) through (h) above with respect to all of the Restricted Shares owned by the Controlling Shareholders or the Control Trust, which rights shall be provided for in the Control Trust Agreement, but shall, for purposes of this Agreement, be deemed to be set forth herein as if fully set forth in haec verba. Notwithstanding the foregoing and as provided in the Control Trust Agreement, in the event the Investor does not exercise the Option on or before December 31, 1997 in full and purchase 51,052,626 Series B Shares pursuant to Section 6.3, the Investor's rights of first refusal shall terminate and be of no further force and effect as of December 31, 1997 (or such later date as provided in the Control Trust Agreement). 48 6.3. The Investor's Option to Purchase Shares of G-Modelo Capital Stock. (a) The Controlling Shareholders and the Trustee on behalf of the Option Trust hereby grant to the Investor an irrevocable option (the "Option") to purchase 51,052,626 Series B Shares, which shall be Class II shares representing the variable capital of G-Modelo (it being agreed that such number of shares of G-Modelo capi- tal stock, which when added to the 20,323,498 Series P-C Shares or Series B Shares then owned by the Investor, will cause the Investor to own at least 35.12 percent of the outstanding G-Modelo capital stock after exercise of the Option) (the "Option Shares"), which Option Shares will be obtained by converting the 51,052,626 Series A Shares held in trust pursuant to the Option Trust Agree- ment into a like number of Series B Shares. The exercise price per share payable by the Investor for the Option Shares shall be equal to the "Average Closing Price Per Share of G-Modelo Capital Stock." The Average Closing Price Per Share of G-Modelo Capital Stock shall be equal to the average closing price per share of the Series C Shares on the Bolsa for the 30 trading-days preceding the date of the Option Exercise Notice (as hereinafter de- fined); provided, however, that in the event such Average Closing Price Per Share of G-Modelo Capital Stock (i) is less than 15 times the Adjusted GModelo Per Share Earn- ings (as hereinafter defined), the Average Closing Price Per Share of G-Modelo Capital Stock shall be deemed to be an amount equal to 15 times the Adjusted G-Modelo Per Share Earnings, and (ii) is more than 19 times the Ad- justed G-Modelo Per Share Earnings, the Average Closing Price Per Share of GModelo Capital Stock shall be deemed to be an amount equal to 19 times the Adjusted G-Modelo Per Share Earnings; and provided, further, that (1) if, in addition to the Series C Shares trading on the Bolsa on the date the Average Closing Price Per Share of G- Modelo Capital Stock is determined, the Series A Shares and/or Series B Shares are also traded on the Bolsa on such date, the Average Closing Price Per Share of G- Modelo Capital Stock shall be equal to the quotient (rounded to the fourth decimal) determined by (x) multi- plying the average closing price per share of each Series of G-Modelo so traded on the Bolsa for such 30 trading- day period by the number of outstanding shares of such Series, and (y) adding all such multiplication products 49 to determine the sum thereof, and (z) dividing such sum by the aggregate number of outstanding shares of all Series of capital stock of G-Modelo so traded; (2) if shares of any Series of capital stock of G-Modelo were not

6.3. The Investor's Option to Purchase Shares of G-Modelo Capital Stock. (a) The Controlling Shareholders and the Trustee on behalf of the Option Trust hereby grant to the Investor an irrevocable option (the "Option") to purchase 51,052,626 Series B Shares, which shall be Class II shares representing the variable capital of G-Modelo (it being agreed that such number of shares of G-Modelo capi- tal stock, which when added to the 20,323,498 Series P-C Shares or Series B Shares then owned by the Investor, will cause the Investor to own at least 35.12 percent of the outstanding G-Modelo capital stock after exercise of the Option) (the "Option Shares"), which Option Shares will be obtained by converting the 51,052,626 Series A Shares held in trust pursuant to the Option Trust Agree- ment into a like number of Series B Shares. The exercise price per share payable by the Investor for the Option Shares shall be equal to the "Average Closing Price Per Share of G-Modelo Capital Stock." The Average Closing Price Per Share of G-Modelo Capital Stock shall be equal to the average closing price per share of the Series C Shares on the Bolsa for the 30 trading-days preceding the date of the Option Exercise Notice (as hereinafter de- fined); provided, however, that in the event such Average Closing Price Per Share of G-Modelo Capital Stock (i) is less than 15 times the Adjusted GModelo Per Share Earn- ings (as hereinafter defined), the Average Closing Price Per Share of G-Modelo Capital Stock shall be deemed to be an amount equal to 15 times the Adjusted G-Modelo Per Share Earnings, and (ii) is more than 19 times the Ad- justed G-Modelo Per Share Earnings, the Average Closing Price Per Share of GModelo Capital Stock shall be deemed to be an amount equal to 19 times the Adjusted G-Modelo Per Share Earnings; and provided, further, that (1) if, in addition to the Series C Shares trading on the Bolsa on the date the Average Closing Price Per Share of G- Modelo Capital Stock is determined, the Series A Shares and/or Series B Shares are also traded on the Bolsa on such date, the Average Closing Price Per Share of G- Modelo Capital Stock shall be equal to the quotient (rounded to the fourth decimal) determined by (x) multi- plying the average closing price per share of each Series of G-Modelo so traded on the Bolsa for such 30 trading- day period by the number of outstanding shares of such Series, and (y) adding all such multiplication products 49 to determine the sum thereof, and (z) dividing such sum by the aggregate number of outstanding shares of all Series of capital stock of G-Modelo so traded; (2) if shares of any Series of capital stock of G-Modelo were not traded on the Bolsa for a period of 30 trading-days preceding the date of the Option Exercise Notice, the Average Closing Price Per Share of G-Modelo Capital Stock shall be based on the average closing price per share of such Series of G-Modelo capital stock on the Bolsa for such number of days that such Series of GModelo stock traded on the Bolsa prior to such date, subject to the limitations provided in the immediately preceding provi- so; and (3) if 26,420,548 Series C Shares (such shares representing thirteen percent of the total authorized capital stock of G-Modelo) have not theretofore been sold to the public as contemplated by Section 5.8 and placed on the Bolsa, the Average Closing Price Per Share of G- Modelo Capital Stock shall be conclusively deemed to have been established as provided in clause (i) of the immedi- ately preceding proviso. For purposes hereof, the "Ad- justed G-Modelo Per Share Earnings" shall mean (x) the consolidated after-tax net earnings of G-Modelo calculat- ed in accordance with Mexican GAAP for the most recently completed four quarters prior to the date of the Option Exercise Notice, as reported to the Bolsa, if shares of G-Modelo capital stock have been listed on the Bolsa, or as prepared by G-Modelo, if shares have not been listed, excluding any non-recurring extraordinary items, divided by (y) the aggregate number of outstanding shares of G-Modelo capital stock; and provided, further, that for purposes of this Agreement, such Adjusted G-Modelo Per Share Earnings shall be independently certified by each of C&L and PW. (b) The Option may be exercised by the Investor, in whole or in part, at any time or from time to time commencing on July 1, 1995 and ending on December 31, 1997 by delivery of written notice of such exercise (an "Option Exercise Notice") to the Controlling Share- holders and the Option Trust in accordance with Section 13.10. The Option Exercise Notice shall indicate (i) the date (an "Option Closing Date") and time fixed for the Option Closing (which date shall not be less than ten nor more than forty days following the date of the Option Exercise Notice), (ii) the number of Option Shares to be purchased, and (iii) the Average Closing Price Per Share of G-Modelo Capital Stock. The closing of the purchase 50

of the Option Shares (an "Option Closing") shall take place at such location as the parties may mutually agree

to determine the sum thereof, and (z) dividing such sum by the aggregate number of outstanding shares of all Series of capital stock of G-Modelo so traded; (2) if shares of any Series of capital stock of G-Modelo were not traded on the Bolsa for a period of 30 trading-days preceding the date of the Option Exercise Notice, the Average Closing Price Per Share of G-Modelo Capital Stock shall be based on the average closing price per share of such Series of G-Modelo capital stock on the Bolsa for such number of days that such Series of GModelo stock traded on the Bolsa prior to such date, subject to the limitations provided in the immediately preceding provi- so; and (3) if 26,420,548 Series C Shares (such shares representing thirteen percent of the total authorized capital stock of G-Modelo) have not theretofore been sold to the public as contemplated by Section 5.8 and placed on the Bolsa, the Average Closing Price Per Share of G- Modelo Capital Stock shall be conclusively deemed to have been established as provided in clause (i) of the immedi- ately preceding proviso. For purposes hereof, the "Ad- justed G-Modelo Per Share Earnings" shall mean (x) the consolidated after-tax net earnings of G-Modelo calculat- ed in accordance with Mexican GAAP for the most recently completed four quarters prior to the date of the Option Exercise Notice, as reported to the Bolsa, if shares of G-Modelo capital stock have been listed on the Bolsa, or as prepared by G-Modelo, if shares have not been listed, excluding any non-recurring extraordinary items, divided by (y) the aggregate number of outstanding shares of G-Modelo capital stock; and provided, further, that for purposes of this Agreement, such Adjusted G-Modelo Per Share Earnings shall be independently certified by each of C&L and PW. (b) The Option may be exercised by the Investor, in whole or in part, at any time or from time to time commencing on July 1, 1995 and ending on December 31, 1997 by delivery of written notice of such exercise (an "Option Exercise Notice") to the Controlling Share- holders and the Option Trust in accordance with Section 13.10. The Option Exercise Notice shall indicate (i) the date (an "Option Closing Date") and time fixed for the Option Closing (which date shall not be less than ten nor more than forty days following the date of the Option Exercise Notice), (ii) the number of Option Shares to be purchased, and (iii) the Average Closing Price Per Share of G-Modelo Capital Stock. The closing of the purchase 50

of the Option Shares (an "Option Closing") shall take place at such location as the parties may mutually agree upon. (c) At any Option Closing hereunder (i) the Investor shall pay in immediately available funds an aggregate purchase price for the Option Shares to be purchased (the "Aggregate Option Price") equal to the product of (A)

of the Option Shares (an "Option Closing") shall take place at such location as the parties may mutually agree upon. (c) At any Option Closing hereunder (i) the Investor shall pay in immediately available funds an aggregate purchase price for the Option Shares to be purchased (the "Aggregate Option Price") equal to the product of (A) the Average Closing Price Per Share of G- Modelo Capital Stock and (B) the number of Option Shares being purchased at such Option Closing converted into United States dollars at the Free Exchange Rate, and (ii) the Trustee on behalf of the Option Trust shall deliver to the Investor a certificate or certificates represent- ing the number of Option Shares so purchased, duly en- dorsed in the name of the Investor. (d) In the event that any purchase of Option Shares by the Investor pursuant to this Section 6.3 would require the approval of or any filing with any Mexican or United States governmental agency, including, without limitation, the Mexican Foreign Investment Com- mission pursuant to the LRMI, the LEC or the United States Federal Trade Commission or the Antitrust Division of the United States Department of Justice pursuant to the HSR Act, and such approval has not been obtained or all waiting periods have not expired or been terminated prior to the Option Closing Date, (x) if the approval of the Mexican Foreign Investment Commission pursuant to the LRMI is the sole remaining approval and all other appli- cable waiting periods have expired or been terminated, the Investor shall have the right to appoint a designated purchaser to consummate such purchase pursuant to Section 5.3(a), or (y) the Option Closing Date shall automati- cally be extended to the date which is no more than three business days after the approval of all such governmental agencies has been granted and all waiting periods have expired or been terminated; provided, however, the Option Closing Date may not be extended beyond August 10, 1998. In the event that the Option Closing is extended pursuant to clause (y) of the immediately preceding sentence, the Aggregate Option Price shall be reduced by the aggregate amount of dividends on the Option Shares to be purchased at the Option Closing, if any, declared following the Option Closing Date set forth in the Option Exercise Notice and paid to holders of record on a date which is prior to the date the Option Closing, as so extended 51 occurs; provided, however, the Investor shall be required to pay interest on such Aggregate Option Price at the Prime Rate, for the period beginning on the Option Clos- ing Date set forth in the Option Exercise Notice to but not including the date the Option Closing, as so extend- ed, occurs. 6.4. The Investor's Option to Purchase Diblo Common Shares. (a) The Controlling Shareholders and the Trustee on behalf of the Banamex Trust hereby grant to the Investor an irrevocable option (the "Diblo Option") to purchase 32,237,145 Diblo Series B Shares, which shall be Class II shares representing the variable capital of Diblo (it being agreed that such number of shares of Diblo capital stock, which when added to the 24,329,922 Diblo Series B Shares then owned by the Investor, will cause the Investor to own at least 23.25 percent of the outstanding Diblo capital stock after exercise of the Diblo Option) (the "Diblo Option Shares"), which Diblo Option Shares are held in the Banamex Trust. The exer- cise price per share payable by the Investor for the Diblo Option Shares (the "Diblo Option Price Per Share") shall be calculated by (i) adding the Total G-Modelo Common Equity Capitalization (as hereinafter defined) to the product obtained by multiplying the Average Closing Price Per Share of G-Modelo Capital Stock by the total number of Series P-C Shares then outstanding (the "Total G-Modelo Equity Capitalization"), (ii) dividing the Total G-Modelo Equity Capitalization by G-Modelo's aggregate percentage ownership of the outstanding Diblo capital stock on the day preceding the date of the Diblo Option Exercise Notice (as hereinafter defined)(the "Total Diblo Equity Capitalization"), and (iii) dividing the Total Diblo Equity Capitalization by the aggregate number of Diblo Common Shares and Diblo P-C Shares outstanding at the close of business on the day preceding the date of the Diblo Option Exercise Notice (the "Diblo Per Share Market Price"). For purposes hereof, "Total G-Modelo Common Equity Capitalization" shall mean the product obtained by multiplying (x) the Average Closing Price Per Share of G-Modelo Capital Stock by (y) the aggregate number of Series A Shares, Series B Shares and Series C Shares outstanding at the close of business on the day preceding the date of the Diblo Option Exercise Notice. The determination of the Diblo Option Price Per Share 52

occurs; provided, however, the Investor shall be required to pay interest on such Aggregate Option Price at the Prime Rate, for the period beginning on the Option Clos- ing Date set forth in the Option Exercise Notice to but not including the date the Option Closing, as so extend- ed, occurs. 6.4. The Investor's Option to Purchase Diblo Common Shares. (a) The Controlling Shareholders and the Trustee on behalf of the Banamex Trust hereby grant to the Investor an irrevocable option (the "Diblo Option") to purchase 32,237,145 Diblo Series B Shares, which shall be Class II shares representing the variable capital of Diblo (it being agreed that such number of shares of Diblo capital stock, which when added to the 24,329,922 Diblo Series B Shares then owned by the Investor, will cause the Investor to own at least 23.25 percent of the outstanding Diblo capital stock after exercise of the Diblo Option) (the "Diblo Option Shares"), which Diblo Option Shares are held in the Banamex Trust. The exer- cise price per share payable by the Investor for the Diblo Option Shares (the "Diblo Option Price Per Share") shall be calculated by (i) adding the Total G-Modelo Common Equity Capitalization (as hereinafter defined) to the product obtained by multiplying the Average Closing Price Per Share of G-Modelo Capital Stock by the total number of Series P-C Shares then outstanding (the "Total G-Modelo Equity Capitalization"), (ii) dividing the Total G-Modelo Equity Capitalization by G-Modelo's aggregate percentage ownership of the outstanding Diblo capital stock on the day preceding the date of the Diblo Option Exercise Notice (as hereinafter defined)(the "Total Diblo Equity Capitalization"), and (iii) dividing the Total Diblo Equity Capitalization by the aggregate number of Diblo Common Shares and Diblo P-C Shares outstanding at the close of business on the day preceding the date of the Diblo Option Exercise Notice (the "Diblo Per Share Market Price"). For purposes hereof, "Total G-Modelo Common Equity Capitalization" shall mean the product obtained by multiplying (x) the Average Closing Price Per Share of G-Modelo Capital Stock by (y) the aggregate number of Series A Shares, Series B Shares and Series C Shares outstanding at the close of business on the day preceding the date of the Diblo Option Exercise Notice. The determination of the Diblo Option Price Per Share 52 shall be subject to the limitations and restrictions set forth in, and shall be calculated in accordance with, the two provisory clauses in the third sentence of Section 6.3(a) above; provided, however, the Adjusted G-Modelo Per Share Earnings shall be calculated during the most recently completed four quarters prior to the date of the Diblo Option Exercise Notice and all references to Option Exercise Notice in Section 6.3(a) shall mean the Diblo Option Exercise Notice. (b) The Diblo Option may be exercised by the Investor, in whole or in part, at any time or from time to time commencing on July 1, 1995 and ending on December 31, 1997 by delivery of written notice of such exercise (the "Diblo Option Exercise Notice") to the Controlling Shareholders and the Banamex Trust in accor- dance with Section 13.10. The Diblo Option Exercise Notice shall indicate (i) the date (the "Diblo Option Closing Date") and time fixed for the Diblo Option Clos- ing (which date shall not be less than ten nor more than forty days following the date of the Diblo Option Exer- cise Notice), (ii) the number of Diblo Option Shares to be purchased, and (iii) the Diblo Option Price Per Share. The closing of the purchase of the Diblo Option Shares (the "Diblo Option Closing") shall take place at such location as the parties may mutually agree upon. (c) At any Diblo Option Closing hereunder (i) the Investor shall pay in immediately available funds an aggregate purchase price for the Diblo Option Shares to be purchased (the "Aggregate Diblo Option Price") equal to the product of (A) the Diblo Option Price Per Share and (B) the number of Diblo Option Shares being purchased at such Diblo Option Closing converted into United States dollars at the Free Exchange Rate, and (ii) the Trustee on behalf of the Banamex Trust shall deliver to the Investor a certificate or certificates represent- ing the number of Diblo Option Shares so purchased, duly endorsed in the name of the Investor. (d) In the event that any purchase of Diblo Option Shares by the Investor pursuant to this Section 6.4 would require the approval of or any filing with any Mexican or United States governmental agency, including, without limitation, the Mexican Foreign In- vestment Commission pursuant to the LRMI, the LEC or the United States Federal Trade Commission or the Antitrust 53

shall be subject to the limitations and restrictions set forth in, and shall be calculated in accordance with, the two provisory clauses in the third sentence of Section 6.3(a) above; provided, however, the Adjusted G-Modelo Per Share Earnings shall be calculated during the most recently completed four quarters prior to the date of the Diblo Option Exercise Notice and all references to Option Exercise Notice in Section 6.3(a) shall mean the Diblo Option Exercise Notice. (b) The Diblo Option may be exercised by the Investor, in whole or in part, at any time or from time to time commencing on July 1, 1995 and ending on December 31, 1997 by delivery of written notice of such exercise (the "Diblo Option Exercise Notice") to the Controlling Shareholders and the Banamex Trust in accor- dance with Section 13.10. The Diblo Option Exercise Notice shall indicate (i) the date (the "Diblo Option Closing Date") and time fixed for the Diblo Option Clos- ing (which date shall not be less than ten nor more than forty days following the date of the Diblo Option Exer- cise Notice), (ii) the number of Diblo Option Shares to be purchased, and (iii) the Diblo Option Price Per Share. The closing of the purchase of the Diblo Option Shares (the "Diblo Option Closing") shall take place at such location as the parties may mutually agree upon. (c) At any Diblo Option Closing hereunder (i) the Investor shall pay in immediately available funds an aggregate purchase price for the Diblo Option Shares to be purchased (the "Aggregate Diblo Option Price") equal to the product of (A) the Diblo Option Price Per Share and (B) the number of Diblo Option Shares being purchased at such Diblo Option Closing converted into United States dollars at the Free Exchange Rate, and (ii) the Trustee on behalf of the Banamex Trust shall deliver to the Investor a certificate or certificates represent- ing the number of Diblo Option Shares so purchased, duly endorsed in the name of the Investor. (d) In the event that any purchase of Diblo Option Shares by the Investor pursuant to this Section 6.4 would require the approval of or any filing with any Mexican or United States governmental agency, including, without limitation, the Mexican Foreign In- vestment Commission pursuant to the LRMI, the LEC or the United States Federal Trade Commission or the Antitrust 53 Division of the United States Department of Justice pursuant to the HSR Act, and such approval has not been obtained or all waiting periods have not expired or been terminated prior to the Diblo Option Closing Date, (x) if the approval of the Mexican Foreign Investment Commission pursuant to the LRMI is the sole remaining approval and all other applicable waiting periods have expired or been terminated, the Investor shall have the right to appoint a designated purchaser to consummate such purchase pursu- ant to Section 5.3(a) or (y) the Diblo Option Closing Date shall automatically be extended to the date which is no more than three business days after the approval of all such governmental agencies has been granted and all waiting periods have expired or been terminated; provid- ed, however, the Diblo Option Closing Date may not be extended beyond August 10, 1998. In the event that the Diblo Option Closing is extended pursuant to clause (y) of the immediately preceding sentence, the Aggregate Diblo Option Price shall be reduced by the aggregate amount of dividends on the Diblo Option Shares to be purchased at the Diblo Option Closing, if any, declared following the Diblo Option Closing Date set forth in the Diblo Option Exercise Notice and paid to holders of record on a date which is prior to the date the Diblo Option Closing, as so extended, occurs; provided, howev- er, the Investor shall be required to pay interest on such Aggregate Diblo Option Price at the Prime Rate, for the period beginning on the Diblo Option Closing Date set forth in the Diblo Option Exercise Notice to but not including the date the Diblo Option Closing, as so extended, occurs. 6.5. Consequences of Failure to Convert Series P-C Shares. In the event that the Investor does not convert the Series P-C Shares into a like number of Series B Shares on or prior to December 31, 1996, in accordance with the terms of the Series P-C Shares, then the following provisions shall be mandatorily and irrevo- cably applicable and binding on all parties to this Agreement. (a) The Series P-C Shares shall be re- deemed by G-Modelo on December 31, 1996, in accordance with the terms of the Series P-C Shares and the Amended G-Modelo By-laws. 54

Division of the United States Department of Justice pursuant to the HSR Act, and such approval has not been obtained or all waiting periods have not expired or been terminated prior to the Diblo Option Closing Date, (x) if the approval of the Mexican Foreign Investment Commission pursuant to the LRMI is the sole remaining approval and all other applicable waiting periods have expired or been terminated, the Investor shall have the right to appoint a designated purchaser to consummate such purchase pursu- ant to Section 5.3(a) or (y) the Diblo Option Closing Date shall automatically be extended to the date which is no more than three business days after the approval of all such governmental agencies has been granted and all waiting periods have expired or been terminated; provid- ed, however, the Diblo Option Closing Date may not be extended beyond August 10, 1998. In the event that the Diblo Option Closing is extended pursuant to clause (y) of the immediately preceding sentence, the Aggregate Diblo Option Price shall be reduced by the aggregate amount of dividends on the Diblo Option Shares to be purchased at the Diblo Option Closing, if any, declared following the Diblo Option Closing Date set forth in the Diblo Option Exercise Notice and paid to holders of record on a date which is prior to the date the Diblo Option Closing, as so extended, occurs; provided, howev- er, the Investor shall be required to pay interest on such Aggregate Diblo Option Price at the Prime Rate, for the period beginning on the Diblo Option Closing Date set forth in the Diblo Option Exercise Notice to but not including the date the Diblo Option Closing, as so extended, occurs. 6.5. Consequences of Failure to Convert Series P-C Shares. In the event that the Investor does not convert the Series P-C Shares into a like number of Series B Shares on or prior to December 31, 1996, in accordance with the terms of the Series P-C Shares, then the following provisions shall be mandatorily and irrevo- cably applicable and binding on all parties to this Agreement. (a) The Series P-C Shares shall be re- deemed by G-Modelo on December 31, 1996, in accordance with the terms of the Series P-C Shares and the Amended G-Modelo By-laws. 54

(b) The rights granted to the Investor to purchase Option Shares and Diblo Option Shares pursuant to Sections 6.3 and 6.4, respectively, the restrictions on transfer and the right of first refusal granted to the Investor pursuant to Sections 6.1 and 6.2(i) hereof and Clause Eighth and Annex 3 of the Control Trust Agreement, respectively, and the restrictions on transfer and the right of first refusal granted to the Controlling Share- holders pursuant to Section 6.1 and 6.2, respectively, shall expire and be of no further force and effect. (c) The Investor shall have the right (the "Put Right"), in its sole discretion, to require that: (i) the Controlling Sharehold- ers purchase all, but not less than all, of the Shares of G-Modelo Stock (the "GModelo Put Shares") and the Diblo Common Shares (the "Dib- lo Put Shares," and together with the "G-Modelo Put Shares," the "Put Shares") then owned, directly or indirectly, by the Investor and its authorized designees, if any; and (ii) the Controlling Sharehold- ers or G-Modelo or any combination thereof pur- chase all, but not less than all, of the Diblo Put Shares then owned, directly or indirectly, by the Investor and its authorized designees, if any. The Investor shall exercise the Put Right by delivering a written notice (the "Put Notice") to the Controlling Shareholders and G-Modelo in accordance with Section 13.10 indicating (1) the number of Put Shares, (2) the G- Modelo Put Price Per Share (as hereinafter defined) and the Diblo Put Price Per Share (as hereinafter defined), and (3) the date and time fixed for the consummation of such sale (the "Put Closing"), which date shall not be less than ten nor more than forty days following the date of the Put Notice. The purchase price per share for the G-Modelo Put Shares (the "G-Modelo Put Price Per Share") shall be calculated in the same manner and subject to the same limitations as the Average Closing Price Per Share of G-Modelo Capital Stock provided for in Section 6.3(a) except that (x) all references in Section 6.3(a) to Option Exercise Notice shall mean Put Notice, and (y) the 55

Adjusted G-Modelo Per Share Earnings shall be calculated during the most recently completed four quarters

(b) The rights granted to the Investor to purchase Option Shares and Diblo Option Shares pursuant to Sections 6.3 and 6.4, respectively, the restrictions on transfer and the right of first refusal granted to the Investor pursuant to Sections 6.1 and 6.2(i) hereof and Clause Eighth and Annex 3 of the Control Trust Agreement, respectively, and the restrictions on transfer and the right of first refusal granted to the Controlling Share- holders pursuant to Section 6.1 and 6.2, respectively, shall expire and be of no further force and effect. (c) The Investor shall have the right (the "Put Right"), in its sole discretion, to require that: (i) the Controlling Sharehold- ers purchase all, but not less than all, of the Shares of G-Modelo Stock (the "GModelo Put Shares") and the Diblo Common Shares (the "Dib- lo Put Shares," and together with the "G-Modelo Put Shares," the "Put Shares") then owned, directly or indirectly, by the Investor and its authorized designees, if any; and (ii) the Controlling Sharehold- ers or G-Modelo or any combination thereof pur- chase all, but not less than all, of the Diblo Put Shares then owned, directly or indirectly, by the Investor and its authorized designees, if any. The Investor shall exercise the Put Right by delivering a written notice (the "Put Notice") to the Controlling Shareholders and G-Modelo in accordance with Section 13.10 indicating (1) the number of Put Shares, (2) the G- Modelo Put Price Per Share (as hereinafter defined) and the Diblo Put Price Per Share (as hereinafter defined), and (3) the date and time fixed for the consummation of such sale (the "Put Closing"), which date shall not be less than ten nor more than forty days following the date of the Put Notice. The purchase price per share for the G-Modelo Put Shares (the "G-Modelo Put Price Per Share") shall be calculated in the same manner and subject to the same limitations as the Average Closing Price Per Share of G-Modelo Capital Stock provided for in Section 6.3(a) except that (x) all references in Section 6.3(a) to Option Exercise Notice shall mean Put Notice, and (y) the 55

Adjusted G-Modelo Per Share Earnings shall be calculated during the most recently completed four quarters prior to the date of the Put Notice. The purchase price per share for the Diblo Put Shares (the "Diblo Put Price Per Share") shall be calculated in the same manner and sub- ject to the same limitations as the Diblo Option Price Per Share provided for in Section 6.4(a) except that (i) all references in Section 6.3(a) to Option Exercise Notice shall mean Put Notice, and (ii) the Adjusted G- Modelo Per Share Earnings shall be calculated during the most recently completed four quarters prior to the date of the Put Notice. At the Put Closing, (x) the Control- ling Shareholders or G-Modelo or any such combination thereof shall pay an aggregate purchase price for the Put Shares equal to the sum of (A) the product obtained by multiplying the G-Modelo Put Price Per Share by the number of G-Modelo Put Shares, and (B) the product ob- tained by multiplying the Diblo Put Price Per Share by the number of Diblo Put Shares, in United States dollars in immediately available funds, calculated in accordance with the Free Exchange Rate, and (y) the Investor shall deliver to the purchasers certificates representing the Put Shares, duly endorsed in the name of the purchaser. (d) In addition to, and not in lieu of, the Put Rights, the Investor shall have the right (the "Withdrawal Right"), in its sole discretion, to require that G-Modelo (in the case of G-Modelo capital stock) and Diblo (in the case of Diblo capital stock) purchase all, but not less than all, of the G-Modelo Put Shares and the Diblo Put Shares, respectively, then owned, directly or indirectly, by the Investor and its authorized designees, if any, and GModelo and Diblo shall be obligated to purchase all of such shares. The Investor shall exercise the Withdrawal Right by delivering a written notice (the "Withdrawal Notice") to the Controlling Shareholders, G- Modelo and Diblo in accordance with Section 13.10 indi- cating the number of G-Modelo Put Shares and Diblo Put Shares to be withdrawn. G-Modelo, Diblo and the Control- ling Shareholders, in their capacity as shareholders, directors or officers of G-Modelo and Diblo and as mem- bers of the technical committees of the Control Trust, the Option Trust and the Banamex Trust, will take all actions, and do all things necessary to ensure that the withdrawal is completed (the "Withdrawal Closing") as soon as permitted by Mexican law, the Amended GModelo By-laws and the Amended Diblo By-laws. For purposes of 56

Adjusted G-Modelo Per Share Earnings shall be calculated during the most recently completed four quarters prior to the date of the Put Notice. The purchase price per share for the Diblo Put Shares (the "Diblo Put Price Per Share") shall be calculated in the same manner and sub- ject to the same limitations as the Diblo Option Price Per Share provided for in Section 6.4(a) except that (i) all references in Section 6.3(a) to Option Exercise Notice shall mean Put Notice, and (ii) the Adjusted G- Modelo Per Share Earnings shall be calculated during the most recently completed four quarters prior to the date of the Put Notice. At the Put Closing, (x) the Control- ling Shareholders or G-Modelo or any such combination thereof shall pay an aggregate purchase price for the Put Shares equal to the sum of (A) the product obtained by multiplying the G-Modelo Put Price Per Share by the number of G-Modelo Put Shares, and (B) the product ob- tained by multiplying the Diblo Put Price Per Share by the number of Diblo Put Shares, in United States dollars in immediately available funds, calculated in accordance with the Free Exchange Rate, and (y) the Investor shall deliver to the purchasers certificates representing the Put Shares, duly endorsed in the name of the purchaser. (d) In addition to, and not in lieu of, the Put Rights, the Investor shall have the right (the "Withdrawal Right"), in its sole discretion, to require that G-Modelo (in the case of G-Modelo capital stock) and Diblo (in the case of Diblo capital stock) purchase all, but not less than all, of the G-Modelo Put Shares and the Diblo Put Shares, respectively, then owned, directly or indirectly, by the Investor and its authorized designees, if any, and GModelo and Diblo shall be obligated to purchase all of such shares. The Investor shall exercise the Withdrawal Right by delivering a written notice (the "Withdrawal Notice") to the Controlling Shareholders, G- Modelo and Diblo in accordance with Section 13.10 indi- cating the number of G-Modelo Put Shares and Diblo Put Shares to be withdrawn. G-Modelo, Diblo and the Control- ling Shareholders, in their capacity as shareholders, directors or officers of G-Modelo and Diblo and as mem- bers of the technical committees of the Control Trust, the Option Trust and the Banamex Trust, will take all actions, and do all things necessary to ensure that the withdrawal is completed (the "Withdrawal Closing") as soon as permitted by Mexican law, the Amended GModelo By-laws and the Amended Diblo By-laws. For purposes of 56

this Section 6.5(d), the withdrawal price per share for the G-Modelo Put Shares pursuant to the Withdrawal Right (the "G-Modelo Withdrawal Price Per Share") shall be the amount per share of G-Modelo capital stock paid by G- Modelo to the Investor in connection with the exercise of the Withdrawal Right pursuant to the Amended G-Modelo By- laws. For purposes of this Section 6.5(d), the with- drawal price per share for the Diblo Put Shares pursuant to the Withdrawal Right (the "Diblo Withdrawal Price Per Share") shall be the amount per share of Diblo capital stock paid by Diblo to the Investor in connection with the exercise of the Withdrawal Right pursuant to the Amended Diblo By-laws. At the Withdrawal Closing, (x) G- Modelo shall pay an aggregate withdrawal price (the "Aggregate G-Modelo Withdrawal Price") for the G-Modelo Put Shares equal to the product obtained by multiplying the G-Modelo Withdrawal Price Per Share by the number of G-Modelo Put Shares, and Diblo shall pay an aggregate withdrawal price (the "Aggregate Diblo withdrawal Price" and, together with the Aggregate G-Modelo Withdrawal Price, the "Aggregate Withdrawal Price") for the Diblo Put Shares equal to the product obtained by multiplying the Diblo Put Price Per Share by the number of Diblo Put Shares, in Mexican Pesos in immediately available funds, and (y) the Investor shall deliver to G-Modelo and Diblo, as the case may be, the certificates representing the Put Shares, duly endorsed in the names of the companies. In connection with the Investor's exercise of the Withdrawal Right pursuant to this Section 6.5(d), the Controlling Shareholders agree to indemnify, jointly and severally, the Investor for the full amount, if any, of the G-Modelo Withdrawal Price Shortfall (as hereinafter defined) and the Diblo Withdrawal Price Shortfall (as hereinafter defined). For purposes of this Section 6.5(d), (1) the "G- Modelo Withdrawal Price Shortfall" shall be an amount equal to the sum of (A) the difference between the G- Modelo Put Price Per Share calculated in accordance with Section 6.5(c) and the G-Modelo Withdrawal Price Per Share plus (B) an amount equal to the interest on the Aggregate G-Modelo Withdrawal Price and the G-Modelo Withdrawal Price Shortfall at the Prime Rate, for the period beginning on the earliest date on which the Put Closing could have occurred had the Controlling Shareholders purchased the G-Modelo Put Shares pursuant to the Put Right and continuing to but not including the date of the Withdrawal Closing, and (2) the "Diblo Withdrawal Price Shortfall" shall be an amount equal to the sum of 57

this Section 6.5(d), the withdrawal price per share for the G-Modelo Put Shares pursuant to the Withdrawal Right (the "G-Modelo Withdrawal Price Per Share") shall be the amount per share of G-Modelo capital stock paid by G- Modelo to the Investor in connection with the exercise of the Withdrawal Right pursuant to the Amended G-Modelo By- laws. For purposes of this Section 6.5(d), the with- drawal price per share for the Diblo Put Shares pursuant to the Withdrawal Right (the "Diblo Withdrawal Price Per Share") shall be the amount per share of Diblo capital stock paid by Diblo to the Investor in connection with the exercise of the Withdrawal Right pursuant to the Amended Diblo By-laws. At the Withdrawal Closing, (x) G- Modelo shall pay an aggregate withdrawal price (the "Aggregate G-Modelo Withdrawal Price") for the G-Modelo Put Shares equal to the product obtained by multiplying the G-Modelo Withdrawal Price Per Share by the number of G-Modelo Put Shares, and Diblo shall pay an aggregate withdrawal price (the "Aggregate Diblo withdrawal Price" and, together with the Aggregate G-Modelo Withdrawal Price, the "Aggregate Withdrawal Price") for the Diblo Put Shares equal to the product obtained by multiplying the Diblo Put Price Per Share by the number of Diblo Put Shares, in Mexican Pesos in immediately available funds, and (y) the Investor shall deliver to G-Modelo and Diblo, as the case may be, the certificates representing the Put Shares, duly endorsed in the names of the companies. In connection with the Investor's exercise of the Withdrawal Right pursuant to this Section 6.5(d), the Controlling Shareholders agree to indemnify, jointly and severally, the Investor for the full amount, if any, of the G-Modelo Withdrawal Price Shortfall (as hereinafter defined) and the Diblo Withdrawal Price Shortfall (as hereinafter defined). For purposes of this Section 6.5(d), (1) the "G- Modelo Withdrawal Price Shortfall" shall be an amount equal to the sum of (A) the difference between the G- Modelo Put Price Per Share calculated in accordance with Section 6.5(c) and the G-Modelo Withdrawal Price Per Share plus (B) an amount equal to the interest on the Aggregate G-Modelo Withdrawal Price and the G-Modelo Withdrawal Price Shortfall at the Prime Rate, for the period beginning on the earliest date on which the Put Closing could have occurred had the Controlling Shareholders purchased the G-Modelo Put Shares pursuant to the Put Right and continuing to but not including the date of the Withdrawal Closing, and (2) the "Diblo Withdrawal Price Shortfall" shall be an amount equal to the sum of 57

(C) the difference between the Diblo Put Price Per Share calculated in accordance with Section 6.5(c) and the Diblo Withdrawal Price Per Share plus (D) an amount equal to the interest on the Aggregate Diblo Withdrawal Price and the Diblo Withdrawal Price Shortfall at the Prime Rate for the period beginning on the earliest date on which the Put Closing could have occurred had the Con- trolling Shareholders purchased the Diblo Put Shares pursuant to the Put Right and continuing to but not in- cluding the date of the Withdrawal Closing. The Controlling Shareholders agree to pay the G-Modelo Withdrawal Price Shortfall and the Diblo Withdrawal Price Shortfall to the Investor in United States dollars in immediately available funds calculated in accordance with the Free Exchange Rate within three business days after the With- drawal Closing. (e) The Controlling Shareholders shall have the right (the "Call Right") to require that the Investor sell all, but not less than all, of the Put Shares, and the Investor shall be obligated to so sell all of the Put Shares. The Controlling Shareholders shall exercise the Call Right by delivering a written notice (the "Call Notice") to the Investor in accordance with Section 13.10 indicating the total number of Put Shares, (ii) the Aggregate Call Purchase Price (as here- inafter defined), and (iii) the date and time fixed for the consummation of such sale (the "Call Closing"), which date shall not be less than ten nor more than forty days following the date of the Call Notice. The purchase price per share for the Put Shares shall be calculated in the same manner and subject to the same limitations as provided for in Section 6.5(c) except that (i) all refer- ences in Section 6.3(a) to Option Exercise Notice shall mean Call Notice, and (ii) the Adjusted G-Modelo Per Share Earnings shall be calculated during the most recently completed four quarters prior to the date of the Call Notice (the "Call Price Per Share"). At the Call Closing, the purchasers shall pay an aggregate purchase price for the Put Shares equal to the Call Price Per Share multiplied by the number of Put Shares, in United States dollars in immediately available funds, calculated in accordance with the Free Exchange Rate, and (ii) the Investor shall deliver to the purchasers certificates representing the Put Shares, duly endorsed in the name of the purchasers. 58

(f) Following consummation of the trans- actions contemplated by paragraphs (a) and (c) or (d) or

(C) the difference between the Diblo Put Price Per Share calculated in accordance with Section 6.5(c) and the Diblo Withdrawal Price Per Share plus (D) an amount equal to the interest on the Aggregate Diblo Withdrawal Price and the Diblo Withdrawal Price Shortfall at the Prime Rate for the period beginning on the earliest date on which the Put Closing could have occurred had the Con- trolling Shareholders purchased the Diblo Put Shares pursuant to the Put Right and continuing to but not in- cluding the date of the Withdrawal Closing. The Controlling Shareholders agree to pay the G-Modelo Withdrawal Price Shortfall and the Diblo Withdrawal Price Shortfall to the Investor in United States dollars in immediately available funds calculated in accordance with the Free Exchange Rate within three business days after the With- drawal Closing. (e) The Controlling Shareholders shall have the right (the "Call Right") to require that the Investor sell all, but not less than all, of the Put Shares, and the Investor shall be obligated to so sell all of the Put Shares. The Controlling Shareholders shall exercise the Call Right by delivering a written notice (the "Call Notice") to the Investor in accordance with Section 13.10 indicating the total number of Put Shares, (ii) the Aggregate Call Purchase Price (as here- inafter defined), and (iii) the date and time fixed for the consummation of such sale (the "Call Closing"), which date shall not be less than ten nor more than forty days following the date of the Call Notice. The purchase price per share for the Put Shares shall be calculated in the same manner and subject to the same limitations as provided for in Section 6.5(c) except that (i) all refer- ences in Section 6.3(a) to Option Exercise Notice shall mean Call Notice, and (ii) the Adjusted G-Modelo Per Share Earnings shall be calculated during the most recently completed four quarters prior to the date of the Call Notice (the "Call Price Per Share"). At the Call Closing, the purchasers shall pay an aggregate purchase price for the Put Shares equal to the Call Price Per Share multiplied by the number of Put Shares, in United States dollars in immediately available funds, calculated in accordance with the Free Exchange Rate, and (ii) the Investor shall deliver to the purchasers certificates representing the Put Shares, duly endorsed in the name of the purchasers. 58

(f) Following consummation of the trans- actions contemplated by paragraphs (a) and (c) or (d) or (e) and the performance in full by all parties of all of their obligations thereunder, this Agreement shall termi- nate (other than Sections 5.1(b), 13.8, 13.9, 13.10, 13.11, 13.12 and Article XII). 6.6. Restriction on Dispositions to Competi- tors. Notwithstanding anything to the contrary contained in this Agreement, none of the G-Modelo Signatories, the Banamex Trust, the Option Trust or the Investor shall, and the Controlling Shareholders as members of the tech- nical committee of the Control Trust shall cause the Control Trust not to, sell or offer to sell and the G- Modelo Signatories shall cause the other Controlling Shareholders not to sell or offer to sell any shares of capital stock of G-Modelo (other than Series C Shares to be sold on a widely distributed basis in accordance with Section 5.8) or any G-Modelo Corporation to any Person or its controlling shareholders engaged, directly or indi- rectly, in the production, distribution or sale of beer in or to the United States or Mexico other than the Investor or its designees in accordance with the terms of this Agreement. 6.7. Restrictions on Acquiring Series C Shares. Until the earlier of (x) such time as the Inves- tor has exercised the Option in full or (y) the expira- tion of the Option, the Controlling Shareholders and A-B each agree that they will not, directly or indirectly through affiliates, nominees or otherwise, acquire record or beneficial ownership of any Series A Shares, Series B Shares or Series C Shares pursuant to open-market pur- chases. 6.8. Extension of Time Periods. In the event that any purchase of shares of G-Modelo capital stock or Diblo capital stock by A-B, A-BI or the Investor, on the one hand, or the Controlling Shareholders or G-Modelo, on the other hand, pursuant to Sections 6.2, 6.3, 6.4, 6.5 and 12.2 hereof and Clause Eighth and Annex 3 of the Control Trust Agreement is subject to any legal impedi- ment or would require the approval of or any filing with any Mexican or United States governmental agency, includ- ing, without limitation, the Mexican Foreign investment Commission pursuant to the LRMI, the LEC or the United States Federal Trade Commission or the Antitrust Division 59 of the United States Department of Justice pursuant to the HSR Act, and such legal impediment is not removed or approval has not been obtained or all waiting periods have not expired or been terminated prior to the date set

(f) Following consummation of the trans- actions contemplated by paragraphs (a) and (c) or (d) or (e) and the performance in full by all parties of all of their obligations thereunder, this Agreement shall termi- nate (other than Sections 5.1(b), 13.8, 13.9, 13.10, 13.11, 13.12 and Article XII). 6.6. Restriction on Dispositions to Competi- tors. Notwithstanding anything to the contrary contained in this Agreement, none of the G-Modelo Signatories, the Banamex Trust, the Option Trust or the Investor shall, and the Controlling Shareholders as members of the tech- nical committee of the Control Trust shall cause the Control Trust not to, sell or offer to sell and the G- Modelo Signatories shall cause the other Controlling Shareholders not to sell or offer to sell any shares of capital stock of G-Modelo (other than Series C Shares to be sold on a widely distributed basis in accordance with Section 5.8) or any G-Modelo Corporation to any Person or its controlling shareholders engaged, directly or indi- rectly, in the production, distribution or sale of beer in or to the United States or Mexico other than the Investor or its designees in accordance with the terms of this Agreement. 6.7. Restrictions on Acquiring Series C Shares. Until the earlier of (x) such time as the Inves- tor has exercised the Option in full or (y) the expira- tion of the Option, the Controlling Shareholders and A-B each agree that they will not, directly or indirectly through affiliates, nominees or otherwise, acquire record or beneficial ownership of any Series A Shares, Series B Shares or Series C Shares pursuant to open-market pur- chases. 6.8. Extension of Time Periods. In the event that any purchase of shares of G-Modelo capital stock or Diblo capital stock by A-B, A-BI or the Investor, on the one hand, or the Controlling Shareholders or G-Modelo, on the other hand, pursuant to Sections 6.2, 6.3, 6.4, 6.5 and 12.2 hereof and Clause Eighth and Annex 3 of the Control Trust Agreement is subject to any legal impedi- ment or would require the approval of or any filing with any Mexican or United States governmental agency, includ- ing, without limitation, the Mexican Foreign investment Commission pursuant to the LRMI, the LEC or the United States Federal Trade Commission or the Antitrust Division 59 of the United States Department of Justice pursuant to the HSR Act, and such legal impediment is not removed or approval has not been obtained or all waiting periods have not expired or been terminated prior to the date set for the consummation of the acquisition of such shares, the parties hereto agree that the termination of all exercise periods during which such acquisition may take place shall be tolled for a period not to exceed six months from the expiration date of such period and as a result of such tolling the closing date for any such acquisition shall automatically be extended to a date which is no more than three business days after the approval of all such governmental agencies has been granted and all waiting periods have expired or been terminated; provided, however, such closing date may not be extended to a date which is six months beyond the day following the last day that such closing could otherwise have taken place. ARTICLE VII BOARDS OF DIRECTORS; VOTING 7.1. Boards of Directors. Pursuant to the Amended G-Modelo By-laws: (a) Effective as of the Closing Date (i) the number of members of the G-Modelo Board of Directors shall be fixed at fourteen (each of whom may have an alternate), three of whom shall be nominated by the Investor (the "Investor Nominees") and eleven of whom shall be nominated by the Controlling Shareholders (the "Controlling Shareholder Nominees") and (ii) the Investor Nominees and the Controlling Shareholder Nominees shall be elected to the G-Modelo Board of Directors, in accor- dance with Mexican law and the Amended G-Modelo By-laws. A-B and the Controlling Shareholders agree to consider the advisability of inviting up to four independent individuals to become members of the fourteen person G- Modelo Board of Directors (the "Independent Nominees") up to three of whom would be nominated by the Controlling Shareholders in consultation with A-B and one of whom would be nominated by A-B in consultation with the Con- trolling Shareholders.

of the United States Department of Justice pursuant to the HSR Act, and such legal impediment is not removed or approval has not been obtained or all waiting periods have not expired or been terminated prior to the date set for the consummation of the acquisition of such shares, the parties hereto agree that the termination of all exercise periods during which such acquisition may take place shall be tolled for a period not to exceed six months from the expiration date of such period and as a result of such tolling the closing date for any such acquisition shall automatically be extended to a date which is no more than three business days after the approval of all such governmental agencies has been granted and all waiting periods have expired or been terminated; provided, however, such closing date may not be extended to a date which is six months beyond the day following the last day that such closing could otherwise have taken place. ARTICLE VII BOARDS OF DIRECTORS; VOTING 7.1. Boards of Directors. Pursuant to the Amended G-Modelo By-laws: (a) Effective as of the Closing Date (i) the number of members of the G-Modelo Board of Directors shall be fixed at fourteen (each of whom may have an alternate), three of whom shall be nominated by the Investor (the "Investor Nominees") and eleven of whom shall be nominated by the Controlling Shareholders (the "Controlling Shareholder Nominees") and (ii) the Investor Nominees and the Controlling Shareholder Nominees shall be elected to the G-Modelo Board of Directors, in accor- dance with Mexican law and the Amended G-Modelo By-laws. A-B and the Controlling Shareholders agree to consider the advisability of inviting up to four independent individuals to become members of the fourteen person G- Modelo Board of Directors (the "Independent Nominees") up to three of whom would be nominated by the Controlling Shareholders in consultation with A-B and one of whom would be nominated by A-B in consultation with the Con- trolling Shareholders. 60

(b) Effective as of the time the Investor and its authorized designees, if any, own, in the aggre- gate, at least 35.12 percent of G-Modelo's outstanding capital stock (i) the number of members of the G-Modelo Board of Directors shall be increased to twenty-one (each of whom may have an alternate), the number of Investor Nominees shall be increased to ten and the number of Controlling Shareholder Nominees shall remain at eleven, (ii) A-B and the Controlling Shareholders will consider maintaining the appointment of the Independent Nominees, and (iii) the additional Investor Nominees selected to fill such newly created directorships shall be elected to the G-Modelo Board of Directors in accordance with Mexi- can law and the Amended G-Modelo By-laws. (c) All such G-Modelo directors nominated and elected pursuant to paragraphs (a) and (b) above shall serve on the G-Modelo Board of Directors until their respective successors are duly elected and quali- fied in accordance with this Agreement and the provisions of the Amended G-Modelo By-laws. In addition, at each annual meeting of G-Modelo shareholders following the Closing, the Investor Nominees and the Controlling Share- holder Nominees shall be elected to the G-Modelo Board of Directors. (d) Notwithstanding anything contained in this Agreement to the contrary, in the event that the Investor or its authorized designees, if any, acquire, in the aggregate, a number of Series A Shares that represent ten percent or more of G-Modelo's total outstanding capital stock, the Controlling Shareholders shall cause, in accordance with Section 7.1(g), one of the Controlling Shareholder Nominees to be removed from the G-Modelo Board of Directors and the Investor shall be entitled to fill such vacancy. Thereafter, at each annual meeting of G-Modelo shareholders, the Investor shall be entitled to nominate one of the Controlling Shareholder Nominees. (e) For so long as the Controlling Share- holders are entitled to nominate more members of the G- Modelo Board of Directors than A-B, the Controlling Shareholders shall have the right to nominate a Control- ling Shareholder Nominee to act as Chairman of the G-Mod- elo Board of Directors, which nomination shall be approved by a simple majority vote of the G-Modelo Board of Directors.

(b) Effective as of the time the Investor and its authorized designees, if any, own, in the aggre- gate, at least 35.12 percent of G-Modelo's outstanding capital stock (i) the number of members of the G-Modelo Board of Directors shall be increased to twenty-one (each of whom may have an alternate), the number of Investor Nominees shall be increased to ten and the number of Controlling Shareholder Nominees shall remain at eleven, (ii) A-B and the Controlling Shareholders will consider maintaining the appointment of the Independent Nominees, and (iii) the additional Investor Nominees selected to fill such newly created directorships shall be elected to the G-Modelo Board of Directors in accordance with Mexi- can law and the Amended G-Modelo By-laws. (c) All such G-Modelo directors nominated and elected pursuant to paragraphs (a) and (b) above shall serve on the G-Modelo Board of Directors until their respective successors are duly elected and quali- fied in accordance with this Agreement and the provisions of the Amended G-Modelo By-laws. In addition, at each annual meeting of G-Modelo shareholders following the Closing, the Investor Nominees and the Controlling Share- holder Nominees shall be elected to the G-Modelo Board of Directors. (d) Notwithstanding anything contained in this Agreement to the contrary, in the event that the Investor or its authorized designees, if any, acquire, in the aggregate, a number of Series A Shares that represent ten percent or more of G-Modelo's total outstanding capital stock, the Controlling Shareholders shall cause, in accordance with Section 7.1(g), one of the Controlling Shareholder Nominees to be removed from the G-Modelo Board of Directors and the Investor shall be entitled to fill such vacancy. Thereafter, at each annual meeting of G-Modelo shareholders, the Investor shall be entitled to nominate one of the Controlling Shareholder Nominees. (e) For so long as the Controlling Share- holders are entitled to nominate more members of the G- Modelo Board of Directors than A-B, the Controlling Shareholders shall have the right to nominate a Control- ling Shareholder Nominee to act as Chairman of the G-Mod- elo Board of Directors, which nomination shall be approved by a simple majority vote of the G-Modelo Board of Directors. 61

(f) Except as provided in Section 7.1(d), any vacancy on the G-Modelo Board of Directors occurring by reason of death, resignation, removal or other termi- nation of a director elected pursuant to Section 7.1(a) or 7.1(b) shall be filled by a new director nominated by the same party who was entitled to nominate the previous incumbent whose death, resignation, removal or other termination created such vacancy. (g) The party who nominated any director elected pursuant to Section 7.1(a) or 7.1(b), and only such party, shall have the right to remove such director by giving written notice to the Comisario of G-Modelo to call a meeting of G-Modelo shareholders for such purpose. (h) Pursuant to the Amended G-Modelo By- laws and the Amended Diblo By-laws, the Investor shall have rights identical to those set forth in paragraphs (a) through (g) above with respect to Diblo and the Diblo Board of Directors. 7.2. Corporate Actions. (a) G-Modelo and the Controlling Share- holders, in their capacity as shareholders, directors or officers of GModelo and Diblo and as members of the technical committees of the Control Trust, the Banamex Trust and the Option Trust, agree to use their best ef- forts and to take all actions necessary to ensure that during the period the Investor and its authorized design- ees, if any, own, in the aggregate, at least 20,323,498 shares of the outstanding capital stock of G-Modelo and at least 24,329,922 outstanding Diblo Common Shares, the Investor shall be entitled to the following rights and protections as a minority shareholder of G-Modelo and Diblo: (i) The Investor shall have the right to elect three Investor Nominees to the fourteen member G-Modelo Board of Directors and at least two Investor Nominees to G-Modelo's seven member Executive Committee (and their respective alternates). (ii) The Investor shall have the right to name a statutory auditor (Comisario) of G-Modelo.

(f) Except as provided in Section 7.1(d), any vacancy on the G-Modelo Board of Directors occurring by reason of death, resignation, removal or other termi- nation of a director elected pursuant to Section 7.1(a) or 7.1(b) shall be filled by a new director nominated by the same party who was entitled to nominate the previous incumbent whose death, resignation, removal or other termination created such vacancy. (g) The party who nominated any director elected pursuant to Section 7.1(a) or 7.1(b), and only such party, shall have the right to remove such director by giving written notice to the Comisario of G-Modelo to call a meeting of G-Modelo shareholders for such purpose. (h) Pursuant to the Amended G-Modelo By- laws and the Amended Diblo By-laws, the Investor shall have rights identical to those set forth in paragraphs (a) through (g) above with respect to Diblo and the Diblo Board of Directors. 7.2. Corporate Actions. (a) G-Modelo and the Controlling Share- holders, in their capacity as shareholders, directors or officers of GModelo and Diblo and as members of the technical committees of the Control Trust, the Banamex Trust and the Option Trust, agree to use their best ef- forts and to take all actions necessary to ensure that during the period the Investor and its authorized design- ees, if any, own, in the aggregate, at least 20,323,498 shares of the outstanding capital stock of G-Modelo and at least 24,329,922 outstanding Diblo Common Shares, the Investor shall be entitled to the following rights and protections as a minority shareholder of G-Modelo and Diblo: (i) The Investor shall have the right to elect three Investor Nominees to the fourteen member G-Modelo Board of Directors and at least two Investor Nominees to G-Modelo's seven member Executive Committee (and their respective alternates). (ii) The Investor shall have the right to name a statutory auditor (Comisario) of G-Modelo. 62

(iii) The Investor shall have the right to approve any change to the dividend policies of G-Modelo and Diblo set forth in Section 5.9 or to approve any dividend or dis- tribution not in compliance with Section 5.9. (iv) There shall be a majority vote by series of the holders of Series A Shares and Series B Shares and a majority vote of the holders of the Series P-C Shares, at an Extraordinary Meeting of Shareholders of G-Mod- elo to approve (A) amendments to the Amended G-Modelo By-laws or Amended Diblo By-laws which would be contrary to or inconsistent with the Investor's rights contained in this Agreement, (B) acquisitions, divestitures, spin-offs, mergers or consolidations which will modify G-Modelo's earnings or asset base by more than ten percent, or involve companies owned in part by the Controlling Shareholders outside the G-Modelo corporate structure, or (C) except for divestitures of a controlling interest in a G- Modelo Corporation otherwise permitted in (B) above, the sale of any shares of capital stock of any of the G-Modelo Corporations (except as is otherwise required in the by-laws of the Comanditas pursuant to Section 5.4 of this Agreement). (v) A-B shall have the right to approve all pricing and other policies for transactions between G-Modelo or any G-Modelo Corporation, on the one hand, and Procermex, Difa, Gondi, Tramo Cia. de Transportes, S.A. de C.V., a Mexican corporation ("Tramo"), Eurocer- mex, Iberocermex, Tapas, Promotora, Envases or any other Subsidiary in which a Controlling Shareholder has any ownership interest other than through G-Modelo, on the other hand, to assure that such transactions are carried out on an arm's-length basis; provided, however, that such approval shall not be withheld if the resulting pricing for each such transaction is at or below Market Price (as defined); and provided, further, that such approval will be re- quired with respect to pricing or other poli- cies for transactions with Procermex only when 63

(iii) The Investor shall have the right to approve any change to the dividend policies of G-Modelo and Diblo set forth in Section 5.9 or to approve any dividend or dis- tribution not in compliance with Section 5.9. (iv) There shall be a majority vote by series of the holders of Series A Shares and Series B Shares and a majority vote of the holders of the Series P-C Shares, at an Extraordinary Meeting of Shareholders of G-Mod- elo to approve (A) amendments to the Amended G-Modelo By-laws or Amended Diblo By-laws which would be contrary to or inconsistent with the Investor's rights contained in this Agreement, (B) acquisitions, divestitures, spin-offs, mergers or consolidations which will modify G-Modelo's earnings or asset base by more than ten percent, or involve companies owned in part by the Controlling Shareholders outside the G-Modelo corporate structure, or (C) except for divestitures of a controlling interest in a G- Modelo Corporation otherwise permitted in (B) above, the sale of any shares of capital stock of any of the G-Modelo Corporations (except as is otherwise required in the by-laws of the Comanditas pursuant to Section 5.4 of this Agreement). (v) A-B shall have the right to approve all pricing and other policies for transactions between G-Modelo or any G-Modelo Corporation, on the one hand, and Procermex, Difa, Gondi, Tramo Cia. de Transportes, S.A. de C.V., a Mexican corporation ("Tramo"), Eurocer- mex, Iberocermex, Tapas, Promotora, Envases or any other Subsidiary in which a Controlling Shareholder has any ownership interest other than through G-Modelo, on the other hand, to assure that such transactions are carried out on an arm's-length basis; provided, however, that such approval shall not be withheld if the resulting pricing for each such transaction is at or below Market Price (as defined); and provided, further, that such approval will be re- quired with respect to pricing or other poli- cies for transactions with Procermex only when 63

they imply changes to the pricing or policies for transactions with Procermex existing as of March 24, 1993 (which policies are generally described in Exhibit C hereto). For purposes hereof, "Market Price" shall mean for any prod- uct or service, the lowest price available to the purchaser in Mexico from any North American source (including, without limitation, Subsid- iaries of the Investor), whether on a spot or long-term basis, which pricing will be verified from time to time by check bids. Furthermore, in furtherance of the parties' desire to obtain the best available prices, G-Modelo and each G- Modelo Corporation agree to consult on a semi- annual basis with the Investor regarding all purchases of major goods and services acquired by them, regardless of source. Within a rea- sonable period of time following the Closing, G-Modelo will provide to the Investor a sched- ule setting forth for each of the companies referred to in the first sentence of this clause (v), the commodity sold to or purchased by any other G-Modelo Corporation, the annual quantity thereof purchased or sold and a recent representative unit price therefor. (vi) The following planning and control processes shall be presented to and approved by a majority vote of the G-Modelo Board of Directors, provided such vote includes the approval of at least two Investor Nominees (a "Qualified Vote") and thereafter implemented by the G-Modelo management: (A) annual budgets for capital and income statement line items, in reasonable detail, which shall be presented to the G-Modelo Board of Directors in the fourth quarter of each fiscal year and thereafter shall be revised quarterly by a Qualified Vote of the GModelo Board of Directors to reflect changes in the Mexican economy and other market circumstances; (B) the five-year plan for busi- ness strategy, income statement, balance sheet and cash flow statement, which shall be pre- sented to the G-Modelo Board of Directors annu- ally; and (C) monthly and year-to-date operat- ing, financial and sales results versus budget, with updated estimates for the remainder of the 64

current fiscal year which shall be presented at each monthly or bi-monthly G-Modelo Board of Directors (or Executive Committee) meeting. (vii) To promote the sharing of functional skills between G-Modelo and A-B, the Investor Nominees and the Controlling Share- holder Nominees shall mutually agree on the selection of executive and management personnel

they imply changes to the pricing or policies for transactions with Procermex existing as of March 24, 1993 (which policies are generally described in Exhibit C hereto). For purposes hereof, "Market Price" shall mean for any prod- uct or service, the lowest price available to the purchaser in Mexico from any North American source (including, without limitation, Subsid- iaries of the Investor), whether on a spot or long-term basis, which pricing will be verified from time to time by check bids. Furthermore, in furtherance of the parties' desire to obtain the best available prices, G-Modelo and each G- Modelo Corporation agree to consult on a semi- annual basis with the Investor regarding all purchases of major goods and services acquired by them, regardless of source. Within a rea- sonable period of time following the Closing, G-Modelo will provide to the Investor a sched- ule setting forth for each of the companies referred to in the first sentence of this clause (v), the commodity sold to or purchased by any other G-Modelo Corporation, the annual quantity thereof purchased or sold and a recent representative unit price therefor. (vi) The following planning and control processes shall be presented to and approved by a majority vote of the G-Modelo Board of Directors, provided such vote includes the approval of at least two Investor Nominees (a "Qualified Vote") and thereafter implemented by the G-Modelo management: (A) annual budgets for capital and income statement line items, in reasonable detail, which shall be presented to the G-Modelo Board of Directors in the fourth quarter of each fiscal year and thereafter shall be revised quarterly by a Qualified Vote of the GModelo Board of Directors to reflect changes in the Mexican economy and other market circumstances; (B) the five-year plan for busi- ness strategy, income statement, balance sheet and cash flow statement, which shall be pre- sented to the G-Modelo Board of Directors annu- ally; and (C) monthly and year-to-date operat- ing, financial and sales results versus budget, with updated estimates for the remainder of the 64

current fiscal year which shall be presented at each monthly or bi-monthly G-Modelo Board of Directors (or Executive Committee) meeting. (vii) To promote the sharing of functional skills between G-Modelo and A-B, the Investor Nominees and the Controlling Share- holder Nominees shall mutually agree on the selection of executive and management personnel candidates to rotate between G-Modelo and A-B in the Finance, Marketing, Corporate Planning, Brewing and Operations areas commencing as soon as reasonably practicable after the Closing; provided, however, that no participant in such program shall hold an executive office or posi- tion with any host company nor shall such participant have any authority to act in the name or on behalf of, or otherwise to bind, the host company; provided, further, that each party shall continue to pay the compensation of each of such party's participants in the program, as well as all costs and expenses relating to such participation, and the host company shall have no obligations in respect of any such payments. (viii) The Investor shall have the right to approve (A) any issuances of G-Modelo capital stock (other than on a pro rata basis to all G-Modelo shareholders without the pay- ment of any consideration therefor) or (B) any amortization of shares of G-Modelo capital stock. (ix) Whenever any of the matters described in (iii) through (vii) above are to be approved by a G-Modelo Corporation, such matter must first be approved by a Qualified Vote of the G-Modelo Board of Directors; provided, however, with respect to the matters set forth in (iii) above, there shall be no Quali- fied Vote of the GModelo Board of Directors required as long as Section 5.9 is fully com- plied with. 65

(b) G-Modelo and the Controlling Share- holders, in their capacity as shareholders, directors or officers of GModelo and Diblo and as members of the technical committees of the Control Trust, the Banamex Trust and the Option Trust, agree to use their best ef- forts and to take all actions necessary to ensure that during the period the Investor and its authorized design- ees, if any, own, in the aggregate, at least 71,376,124 shares of the outstanding G-Modelo capital stock, in addition to the minority shareholder rights and protecti- ons provided for in Section 7.2(a), the Investor shall be entitled to the following rights and protections as a minority shareholder of G-Modelo and Diblo:

current fiscal year which shall be presented at each monthly or bi-monthly G-Modelo Board of Directors (or Executive Committee) meeting. (vii) To promote the sharing of functional skills between G-Modelo and A-B, the Investor Nominees and the Controlling Share- holder Nominees shall mutually agree on the selection of executive and management personnel candidates to rotate between G-Modelo and A-B in the Finance, Marketing, Corporate Planning, Brewing and Operations areas commencing as soon as reasonably practicable after the Closing; provided, however, that no participant in such program shall hold an executive office or posi- tion with any host company nor shall such participant have any authority to act in the name or on behalf of, or otherwise to bind, the host company; provided, further, that each party shall continue to pay the compensation of each of such party's participants in the program, as well as all costs and expenses relating to such participation, and the host company shall have no obligations in respect of any such payments. (viii) The Investor shall have the right to approve (A) any issuances of G-Modelo capital stock (other than on a pro rata basis to all G-Modelo shareholders without the pay- ment of any consideration therefor) or (B) any amortization of shares of G-Modelo capital stock. (ix) Whenever any of the matters described in (iii) through (vii) above are to be approved by a G-Modelo Corporation, such matter must first be approved by a Qualified Vote of the G-Modelo Board of Directors; provided, however, with respect to the matters set forth in (iii) above, there shall be no Quali- fied Vote of the GModelo Board of Directors required as long as Section 5.9 is fully com- plied with. 65

(b) G-Modelo and the Controlling Share- holders, in their capacity as shareholders, directors or officers of GModelo and Diblo and as members of the technical committees of the Control Trust, the Banamex Trust and the Option Trust, agree to use their best ef- forts and to take all actions necessary to ensure that during the period the Investor and its authorized design- ees, if any, own, in the aggregate, at least 71,376,124 shares of the outstanding G-Modelo capital stock, in addition to the minority shareholder rights and protecti- ons provided for in Section 7.2(a), the Investor shall be entitled to the following rights and protections as a minority shareholder of G-Modelo and Diblo: (i) The Investor shall have the right to elect ten Investor Nominees to the 21 person G-Modelo Board of Directors and at least four Investor Nominees to G-Modelo's nine mem- ber Executive Committee (and their respective alternates). (ii) Prior to implementation by the G-Modelo management, the G-Modelo Board of Directors shall approve the following by a Qualified Vote: (A) the submission of the annual financial statements and proposals to the Ordinary Meeting of Shareholders of G-Mode- lo to change the dividend policies of G-Modelo and Diblo from those set forth in Section 5.9 or to approve any dividend or distribution not in compliance with Section 5.9; (B) capital expenditures or lease commitments over 15 mil- lion United States dollars which were not in- cluded in the annual budget previously ap- proved; (C) entering any business other than (I) the manufacture of beer, containers or packaging materials therefor, (II) the produc- tion of raw materials for the manufacture of beer, containers or packaging materials, or (III) the sale and distribution of beer; (D) borrowing money, issuing guarantees or creating liens or mortgages in excess of 15 million United States dollars; (E) all pricing and other policies for transactions between G-Mode- lo or any G-Modelo Corporation, on the one hand, and Procermex, Difa, Gondi, Tramo, Euroc66 ermex, Iberocermex, Tapas, Promotora, Envases or any other Subsidiary in which a Controlling Shareholder has any ownership interest other than through G-Modelo, on the other hand, to assure that such transactions are carried out at an arm's-length basis; provided, however, that such approval shall not be withheld if the resulting pricing for each such transaction is at or below Market Price; and provided, fur- ther, that such approval will be required with

(b) G-Modelo and the Controlling Share- holders, in their capacity as shareholders, directors or officers of GModelo and Diblo and as members of the technical committees of the Control Trust, the Banamex Trust and the Option Trust, agree to use their best ef- forts and to take all actions necessary to ensure that during the period the Investor and its authorized design- ees, if any, own, in the aggregate, at least 71,376,124 shares of the outstanding G-Modelo capital stock, in addition to the minority shareholder rights and protecti- ons provided for in Section 7.2(a), the Investor shall be entitled to the following rights and protections as a minority shareholder of G-Modelo and Diblo: (i) The Investor shall have the right to elect ten Investor Nominees to the 21 person G-Modelo Board of Directors and at least four Investor Nominees to G-Modelo's nine mem- ber Executive Committee (and their respective alternates). (ii) Prior to implementation by the G-Modelo management, the G-Modelo Board of Directors shall approve the following by a Qualified Vote: (A) the submission of the annual financial statements and proposals to the Ordinary Meeting of Shareholders of G-Mode- lo to change the dividend policies of G-Modelo and Diblo from those set forth in Section 5.9 or to approve any dividend or distribution not in compliance with Section 5.9; (B) capital expenditures or lease commitments over 15 mil- lion United States dollars which were not in- cluded in the annual budget previously ap- proved; (C) entering any business other than (I) the manufacture of beer, containers or packaging materials therefor, (II) the produc- tion of raw materials for the manufacture of beer, containers or packaging materials, or (III) the sale and distribution of beer; (D) borrowing money, issuing guarantees or creating liens or mortgages in excess of 15 million United States dollars; (E) all pricing and other policies for transactions between G-Mode- lo or any G-Modelo Corporation, on the one hand, and Procermex, Difa, Gondi, Tramo, Euroc66 ermex, Iberocermex, Tapas, Promotora, Envases or any other Subsidiary in which a Controlling Shareholder has any ownership interest other than through G-Modelo, on the other hand, to assure that such transactions are carried out at an arm's-length basis; provided, however, that such approval shall not be withheld if the resulting pricing for each such transaction is at or below Market Price; and provided, fur- ther, that such approval will be required with respect to pricing or other policies for trans- actions with Procermex only when they imply changes to the pricing or policies for transac- tion with Procermex existing as of March 24, 1993 (which policies are generally described in Exhibit C hereto); (F) the annual appointment of G-Modelo's external auditors, which shall be one of the "Big 6" international accounting firms; (G) entering into multi-year contracts exceeding 15 million United States dollars in the aggregate; (H) sales of assets exceeding 15 million United States dollars; (I) deviations of over five percent that involve decisions by management from the annual budget previously approved; (J) any new license or sale of trade- marks or technology or modification of same; provided, however, that existing licensing agreements may be renewed automatically without such approval; and (K) closing a major produc- tion facility. (iii) Whenever any of the matters described in (ii) above are to be approved by a G-Modelo Corporation, such matter must first be approved by a Qualified Vote of the G-Modelo Board of Directors; provided, however, with re- spect to the matters set forth in clause (A) thereof, there shall be no Qualified Vote of the G-Modelo Board of Directors required as long as Section 5.9 is fully complied with. (iv) The G-Modelo shareholders may, only by a vote of 70 percent or more of the outstanding shares of GModelo capital stock entitled to vote at an Extraordinary Meeting of Shareholders of G-Modelo, approve (A) a merger, consolidation or spin-off involv67

ing G-Modelo or a G-Modelo Corporation; (B) an amendment to G-Modelo's charter or the Amended GModelo By-laws; and (C) other company action requiring shareholder approval at an Extraordi- nary Meeting of Shareholders of G-Modelo. (v) Except as otherwise provid- ed in the Amended G-Modelo By-laws, all matters requiring shareholder

ermex, Iberocermex, Tapas, Promotora, Envases or any other Subsidiary in which a Controlling Shareholder has any ownership interest other than through G-Modelo, on the other hand, to assure that such transactions are carried out at an arm's-length basis; provided, however, that such approval shall not be withheld if the resulting pricing for each such transaction is at or below Market Price; and provided, fur- ther, that such approval will be required with respect to pricing or other policies for trans- actions with Procermex only when they imply changes to the pricing or policies for transac- tion with Procermex existing as of March 24, 1993 (which policies are generally described in Exhibit C hereto); (F) the annual appointment of G-Modelo's external auditors, which shall be one of the "Big 6" international accounting firms; (G) entering into multi-year contracts exceeding 15 million United States dollars in the aggregate; (H) sales of assets exceeding 15 million United States dollars; (I) deviations of over five percent that involve decisions by management from the annual budget previously approved; (J) any new license or sale of trade- marks or technology or modification of same; provided, however, that existing licensing agreements may be renewed automatically without such approval; and (K) closing a major produc- tion facility. (iii) Whenever any of the matters described in (ii) above are to be approved by a G-Modelo Corporation, such matter must first be approved by a Qualified Vote of the G-Modelo Board of Directors; provided, however, with re- spect to the matters set forth in clause (A) thereof, there shall be no Qualified Vote of the G-Modelo Board of Directors required as long as Section 5.9 is fully complied with. (iv) The G-Modelo shareholders may, only by a vote of 70 percent or more of the outstanding shares of GModelo capital stock entitled to vote at an Extraordinary Meeting of Shareholders of G-Modelo, approve (A) a merger, consolidation or spin-off involv67

ing G-Modelo or a G-Modelo Corporation; (B) an amendment to G-Modelo's charter or the Amended GModelo By-laws; and (C) other company action requiring shareholder approval at an Extraordi- nary Meeting of Shareholders of G-Modelo. (v) Except as otherwise provid- ed in the Amended G-Modelo By-laws, all matters requiring shareholder approval at an Ordinary Meeting of Shareholders of G-Modelo shall be done by a simple majority vote of the shares. ARTICLE VIII CONDITIONS TO THE INVESTOR'S OBLIGATIONS The obligation of the Investor to consummate the transactions contemplated by Article II shall be subject to the satisfaction (or waiver) on or prior to the Closing Date of all of the following conditions: 8.1. Representations, Warranties of the G- Modelo Signatories. All representations and warranties of the GModelo Signatories set forth in Article III shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date, except as otherwise contemplated by this Agreement. 8.2. No Prohibition. The consummation of the transactions contemplated herein shall not be prohibited or delayed by any order, decree or injunction of a court of competent jurisdiction and there shall not have been any action taken or any statute, rule or regulation or order of any court or administrative agency enacted which (a) prohibits or delays the Investor from consummating the transactions contemplated hereby or (b) imposes any material limitation on the ability of the Investor to exercise full rights of ownership of the Series P-C Shares or the Initial Diblo Shares. 68 8.3. No Action. No action, suit or proceeding before any court or governmental or regulatory authority shall be pending or threatened against A-B, A-BI or the Investor or any of their Subsidiaries challenging the validity or legality of the transactions contemplated by this Agreement.

ing G-Modelo or a G-Modelo Corporation; (B) an amendment to G-Modelo's charter or the Amended GModelo By-laws; and (C) other company action requiring shareholder approval at an Extraordi- nary Meeting of Shareholders of G-Modelo. (v) Except as otherwise provid- ed in the Amended G-Modelo By-laws, all matters requiring shareholder approval at an Ordinary Meeting of Shareholders of G-Modelo shall be done by a simple majority vote of the shares. ARTICLE VIII CONDITIONS TO THE INVESTOR'S OBLIGATIONS The obligation of the Investor to consummate the transactions contemplated by Article II shall be subject to the satisfaction (or waiver) on or prior to the Closing Date of all of the following conditions: 8.1. Representations, Warranties of the G- Modelo Signatories. All representations and warranties of the GModelo Signatories set forth in Article III shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date, except as otherwise contemplated by this Agreement. 8.2. No Prohibition. The consummation of the transactions contemplated herein shall not be prohibited or delayed by any order, decree or injunction of a court of competent jurisdiction and there shall not have been any action taken or any statute, rule or regulation or order of any court or administrative agency enacted which (a) prohibits or delays the Investor from consummating the transactions contemplated hereby or (b) imposes any material limitation on the ability of the Investor to exercise full rights of ownership of the Series P-C Shares or the Initial Diblo Shares. 68 8.3. No Action. No action, suit or proceeding before any court or governmental or regulatory authority shall be pending or threatened against A-B, A-BI or the Investor or any of their Subsidiaries challenging the validity or legality of the transactions contemplated by this Agreement. 8.4. HSR Act. Each of A-B and G-Modelo and any other person (as defined in the HSR Act and the rules and regulations thereunder) required in connection with the transactions contemplated in this Agreement to file a Notification and Report Form for Certain Mergers and Acquisitions shall have made such filing and the applicable waiting period with respect to each such filing shall have expired or been terminated. 8.5. Certificates. The G-Modelo Signatories will furnish to the Investor such certificates and other documents, instruments and writings to evidence the fulfillment of the conditions set forth in Article IX as the Investor may reasonably request. 8.6. Opinion. The G-Modelo Signatories will furnish to the Investor, the opinion of Santamarina Y Steta in the form attached hereto as Exhibit D. ARTICLE IX CONDITIONS TO THE G-MODELO SIGNATORIES' AND THE BANAMEX TRUST'S OBLIGATIONS The obligations of the G-Modelo Signatories and the Trustee on behalf of the Banamex Trust to consummate the transactions contemplated in Article II shall be subject to the satisfaction (or waiver) on or prior to the Closing Date of all of the following conditions: 9.1. Representations and Warranties of A-B, A-BI and the Investor. All representations and warran- ties of AB, A-BI and the Investor set forth in Article IV shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date, except as otherwise contemplated by this Agreement.

8.3. No Action. No action, suit or proceeding before any court or governmental or regulatory authority shall be pending or threatened against A-B, A-BI or the Investor or any of their Subsidiaries challenging the validity or legality of the transactions contemplated by this Agreement. 8.4. HSR Act. Each of A-B and G-Modelo and any other person (as defined in the HSR Act and the rules and regulations thereunder) required in connection with the transactions contemplated in this Agreement to file a Notification and Report Form for Certain Mergers and Acquisitions shall have made such filing and the applicable waiting period with respect to each such filing shall have expired or been terminated. 8.5. Certificates. The G-Modelo Signatories will furnish to the Investor such certificates and other documents, instruments and writings to evidence the fulfillment of the conditions set forth in Article IX as the Investor may reasonably request. 8.6. Opinion. The G-Modelo Signatories will furnish to the Investor, the opinion of Santamarina Y Steta in the form attached hereto as Exhibit D. ARTICLE IX CONDITIONS TO THE G-MODELO SIGNATORIES' AND THE BANAMEX TRUST'S OBLIGATIONS The obligations of the G-Modelo Signatories and the Trustee on behalf of the Banamex Trust to consummate the transactions contemplated in Article II shall be subject to the satisfaction (or waiver) on or prior to the Closing Date of all of the following conditions: 9.1. Representations and Warranties of A-B, A-BI and the Investor. All representations and warran- ties of AB, A-BI and the Investor set forth in Article IV shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date, except as otherwise contemplated by this Agreement. 69 9.2. No Prohibition. The consummation of the transactions contemplated herein shall not be prohibited or delayed by any order, decree or injunction of a court of competent jurisdiction and there shall not have been any action taken or any statute, rule or regulation or order of any court or administrative agency enacted which prohibits or delays the G-Modelo Signatories or the Banamex Trust from consummating the transactions contemplated hereby. 9.3. No Action. No action, suit or proceeding before any court or governmental or regulatory authority shall be pending or threatened against G-Modelo, any of the G-Modelo Corporations, the Controlling Shareholders or the Banamex Trust challenging the validity or legality of the transactions contemplated by this Agreement. 9.4. HSR Act. Each of A-B and G-Modelo and any other person (as defined in the HSR Act and the rules and regulations thereunder) required in connection with the transactions contemplated in this Agreement to file a Notification and Report Form for Certain Mergers and Acquisitions shall have made such filing and the applicable waiting period with respect to each such filing shall have expired or been terminated. 9.5. Certificates. The Investor will furnish to the G-Modelo Signatories and the Trustee of the Banam- ex Trust such certificates and other documents, instru- ments and writings to evidence the fulfillment of the conditions set forth in Article VIII as such parties may reasonably request. 9.6. Opinion. The Investor will furnish to the Controlling Shareholders, the opinions of Stephen J. Volland, Esq., Senior Associate General Counsel of A-B, Skadden, Arps, Slate, Meagher & Flom and Creel, Garcia- Cuellar y Muggenburg, in the forms attached hereto as Exhibits E, F and G, respectively. 70

ARTICLE X

9.2. No Prohibition. The consummation of the transactions contemplated herein shall not be prohibited or delayed by any order, decree or injunction of a court of competent jurisdiction and there shall not have been any action taken or any statute, rule or regulation or order of any court or administrative agency enacted which prohibits or delays the G-Modelo Signatories or the Banamex Trust from consummating the transactions contemplated hereby. 9.3. No Action. No action, suit or proceeding before any court or governmental or regulatory authority shall be pending or threatened against G-Modelo, any of the G-Modelo Corporations, the Controlling Shareholders or the Banamex Trust challenging the validity or legality of the transactions contemplated by this Agreement. 9.4. HSR Act. Each of A-B and G-Modelo and any other person (as defined in the HSR Act and the rules and regulations thereunder) required in connection with the transactions contemplated in this Agreement to file a Notification and Report Form for Certain Mergers and Acquisitions shall have made such filing and the applicable waiting period with respect to each such filing shall have expired or been terminated. 9.5. Certificates. The Investor will furnish to the G-Modelo Signatories and the Trustee of the Banam- ex Trust such certificates and other documents, instru- ments and writings to evidence the fulfillment of the conditions set forth in Article VIII as such parties may reasonably request. 9.6. Opinion. The Investor will furnish to the Controlling Shareholders, the opinions of Stephen J. Volland, Esq., Senior Associate General Counsel of A-B, Skadden, Arps, Slate, Meagher & Flom and Creel, Garcia- Cuellar y Muggenburg, in the forms attached hereto as Exhibits E, F and G, respectively. 70

ARTICLE X INDEMNIFICATION 10.1. The Controlling Shareholders', G-Modelo and Diblo Indemnification. Subject to the terms and conditions of this Article X, the Controlling Sharehold- ers shall, jointly and severally, indemnify, defend and hold the Investor and its directors, officers, employees, Subsidiaries and assigns (the "Investor Group") harmless from and against any and all damages, liabilities, obli- gations, claims, demands, judgments, settlements, costs and expenses of any nature whatsoever, including reason- able attorneys' fees (individually a "Loss" or collec- tively "Losses"), directly or indirectly, asserted against, resulting to, imposed upon or incurred by the Investor Group or any member thereof, at any time after the Closing Date and prior to the Expiration Date (as defined in Section 13.1) by reason of or resulting from any inaccuracy of any representation or warranty or any breach or violation of any covenant or agreement of the G-Modelo Signatories contained in this Agreement (collec- tively, the "Investor Group Claims"); provided, however, in the event that the Controlling Shareholders shall fail, refuse or otherwise be unable to indemnify the Investor Group to the full extent of its Losses (other than as provided in the immediately succeeding sentence), G-Modelo and Diblo shall, jointly and severally, indemni- fy, defend and hold the Investor Group harmless from and against any and all Losses which the Controlling Share- holders shall have failed to indemnify the Investor Group from. The provision for indemnification contained in this Section 10.1 shall be operative and effective in respect of Investor Group Claims (other than Investor Group Claims by reason of or resulting from any inaccura- cy of the representations or warranties set forth in Sections 3.1, 3.2 and 3.4, as to which the limitations contained in this sentence shall not be applicable and as to which the Investor Group shall be indemnified to the full extent of all such Investor Group Claims) only if and to the extent the amount of such Investor Group Claims exceeds 15 million United States dollars. 10.2. The Investor's Indemnification. Subject to the terms and conditions of this Article X, the Inves- tor shall indemnify, defend and hold the Controlling Shareholders and G-Modelo and their directors, officers, 71

employees, Subsidiaries and assigns (the "G-Modelo Group") harmless from and against any and all Losses, directly or indirectly, asserted against, resulting to, imposed upon or incurred by the G-Modelo Group or any member thereof, at any time after the Closing Date and prior to the Expiration Date by reason of or resulting from

ARTICLE X INDEMNIFICATION 10.1. The Controlling Shareholders', G-Modelo and Diblo Indemnification. Subject to the terms and conditions of this Article X, the Controlling Sharehold- ers shall, jointly and severally, indemnify, defend and hold the Investor and its directors, officers, employees, Subsidiaries and assigns (the "Investor Group") harmless from and against any and all damages, liabilities, obli- gations, claims, demands, judgments, settlements, costs and expenses of any nature whatsoever, including reason- able attorneys' fees (individually a "Loss" or collec- tively "Losses"), directly or indirectly, asserted against, resulting to, imposed upon or incurred by the Investor Group or any member thereof, at any time after the Closing Date and prior to the Expiration Date (as defined in Section 13.1) by reason of or resulting from any inaccuracy of any representation or warranty or any breach or violation of any covenant or agreement of the G-Modelo Signatories contained in this Agreement (collec- tively, the "Investor Group Claims"); provided, however, in the event that the Controlling Shareholders shall fail, refuse or otherwise be unable to indemnify the Investor Group to the full extent of its Losses (other than as provided in the immediately succeeding sentence), G-Modelo and Diblo shall, jointly and severally, indemni- fy, defend and hold the Investor Group harmless from and against any and all Losses which the Controlling Share- holders shall have failed to indemnify the Investor Group from. The provision for indemnification contained in this Section 10.1 shall be operative and effective in respect of Investor Group Claims (other than Investor Group Claims by reason of or resulting from any inaccura- cy of the representations or warranties set forth in Sections 3.1, 3.2 and 3.4, as to which the limitations contained in this sentence shall not be applicable and as to which the Investor Group shall be indemnified to the full extent of all such Investor Group Claims) only if and to the extent the amount of such Investor Group Claims exceeds 15 million United States dollars. 10.2. The Investor's Indemnification. Subject to the terms and conditions of this Article X, the Inves- tor shall indemnify, defend and hold the Controlling Shareholders and G-Modelo and their directors, officers, 71

employees, Subsidiaries and assigns (the "G-Modelo Group") harmless from and against any and all Losses, directly or indirectly, asserted against, resulting to, imposed upon or incurred by the G-Modelo Group or any member thereof, at any time after the Closing Date and prior to the Expiration Date by reason of or resulting from any inaccuracy of any representation or warranty or any breach or violation of any covenant or agreement of the Investor contained in this Agreement (collectively, the "G-Modelo Group Claims" and together with the Inves- tor Group Claims, the "Claims"). The provision for indemnification by the Investor contained in this Section 10.2 shall be operative and effective in respect of G-Modelo Group Claims only if and to the extent the amount of such GModelo Group Claims (other than G-Modelo Group Claims by reason of or resulting from any inaccura- cy of the representation and warranty set forth in Sec- tion 4.1, as to which the limitation contained in this sentence shall not be applicable and as to which the G- Modelo Group shall be indemnified to the full extent of all such GModelo Group Claims) exceeds 15 million United States dollars. 10.3. Conditions of Indemnification. The obligations and liabilities of the Controlling Sharehold- ers and the Investor, as the case may be, under Sections 10.1 and 10.2 (herein referred to as the "Indemnifying Party"), with respect to Claims made by third parties shall be subject to the following terms and conditions: (a) The person to whom such Claim relates (the "Indemnified Party") will give the Indemnifying Party prompt notice of such Claim, and the Indemnifying Party will assume the defense thereof by representatives chosen by it. (b) If the Indemnifying Party, within a reasonable time after notice of any such Claim, fails to assume the defense thereof, the Indemnified Party or any other member of its group shall (upon further notice to the Indemnifying Party) have the right to undertake the defense, compromise or settlement of such Claim on behalf of and for the account and risk of the Indemnifying Party, subject to the right of the Indemnifying Party to assume the defense of such Claim at any time prior to the settlement, compromise or final determination thereof. 72

employees, Subsidiaries and assigns (the "G-Modelo Group") harmless from and against any and all Losses, directly or indirectly, asserted against, resulting to, imposed upon or incurred by the G-Modelo Group or any member thereof, at any time after the Closing Date and prior to the Expiration Date by reason of or resulting from any inaccuracy of any representation or warranty or any breach or violation of any covenant or agreement of the Investor contained in this Agreement (collectively, the "G-Modelo Group Claims" and together with the Inves- tor Group Claims, the "Claims"). The provision for indemnification by the Investor contained in this Section 10.2 shall be operative and effective in respect of G-Modelo Group Claims only if and to the extent the amount of such GModelo Group Claims (other than G-Modelo Group Claims by reason of or resulting from any inaccura- cy of the representation and warranty set forth in Sec- tion 4.1, as to which the limitation contained in this sentence shall not be applicable and as to which the G- Modelo Group shall be indemnified to the full extent of all such GModelo Group Claims) exceeds 15 million United States dollars. 10.3. Conditions of Indemnification. The obligations and liabilities of the Controlling Sharehold- ers and the Investor, as the case may be, under Sections 10.1 and 10.2 (herein referred to as the "Indemnifying Party"), with respect to Claims made by third parties shall be subject to the following terms and conditions: (a) The person to whom such Claim relates (the "Indemnified Party") will give the Indemnifying Party prompt notice of such Claim, and the Indemnifying Party will assume the defense thereof by representatives chosen by it. (b) If the Indemnifying Party, within a reasonable time after notice of any such Claim, fails to assume the defense thereof, the Indemnified Party or any other member of its group shall (upon further notice to the Indemnifying Party) have the right to undertake the defense, compromise or settlement of such Claim on behalf of and for the account and risk of the Indemnifying Party, subject to the right of the Indemnifying Party to assume the defense of such Claim at any time prior to the settlement, compromise or final determination thereof. 72

(c) Anything in this Section 10.3 to the contrary notwithstanding, (i) if there is a reasonable probability that a Claim may materially and adversely affect the Indemnified Party or any other member of the Indemnified Party's group other than as a result of money damages or other money payments, the Indemnified Party or such member of the Indemnified Party's group shall have the right to defend, at its own cost and expense, and to compromise or settle such Claim with the consent of the Indemnifying Party and (ii) the Indemnifying Party shall not, without the written consent of the Indemnified Party, settle or compromise any Claim or consent to the entry of any judgment which does not include as an uncon- ditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party or such member of the Indemnified Party's group, or both, a release from all liability in respect of such Claim. 10.4. Remedies Cumulative. The remedies provided herein shall be cumulative and shall not pre- clude assertion by any of the parties hereto of any other rights or the seeking of any other remedies against any other party hereto. ARTICLE XI TERMINATION PRIOR TO CLOSING 11.1. Termination. This Agreement may be terminated at any time prior to the Closing: (a) by mutual written consent of A-B and the Controlling Shareholders; (b) by either the Controlling Sharehold- ers or A-B in writing, without liability to the terminat- ing party on account of such termination (provided the terminating party is not otherwise in default or in breach of this Agreement), if the Closing shall not have occurred on or before December 31, 1993; or (c) by either the Controlling Sharehold- ers or A-B in writing, without liability to the terminat- ing party on account of such termination (provided the terminating party is not otherwise in default or in breach of this Agreement), if A-B, A-BI and the Investor

(c) Anything in this Section 10.3 to the contrary notwithstanding, (i) if there is a reasonable probability that a Claim may materially and adversely affect the Indemnified Party or any other member of the Indemnified Party's group other than as a result of money damages or other money payments, the Indemnified Party or such member of the Indemnified Party's group shall have the right to defend, at its own cost and expense, and to compromise or settle such Claim with the consent of the Indemnifying Party and (ii) the Indemnifying Party shall not, without the written consent of the Indemnified Party, settle or compromise any Claim or consent to the entry of any judgment which does not include as an uncon- ditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party or such member of the Indemnified Party's group, or both, a release from all liability in respect of such Claim. 10.4. Remedies Cumulative. The remedies provided herein shall be cumulative and shall not pre- clude assertion by any of the parties hereto of any other rights or the seeking of any other remedies against any other party hereto. ARTICLE XI TERMINATION PRIOR TO CLOSING 11.1. Termination. This Agreement may be terminated at any time prior to the Closing: (a) by mutual written consent of A-B and the Controlling Shareholders; (b) by either the Controlling Sharehold- ers or A-B in writing, without liability to the terminat- ing party on account of such termination (provided the terminating party is not otherwise in default or in breach of this Agreement), if the Closing shall not have occurred on or before December 31, 1993; or (c) by either the Controlling Sharehold- ers or A-B in writing, without liability to the terminat- ing party on account of such termination (provided the terminating party is not otherwise in default or in breach of this Agreement), if A-B, A-BI and the Investor 73 or the Controlling Shareholders, respectively, shall (i) fail to perform in any material respect its covenants and agreements contained herein required to be performed prior to the Closing Date, or (ii) materially breach any of their representations, warranties or covenants con- tained herein if such breach would cause a condition to the obligation of the terminating party to close not to be satisfied and if such failure to perform or breach has not been waived by the terminating party; provided, however, that a party's right to indemnification hereun- der shall not be affected by such party's waiver of its right of termination pursuant to this Section 11.1 if such right of termination arises from a willful breach of this Agreement. 11.2. Procedure and Effect of Termination. In the event of termination of this Agreement and abandon- ment of the transactions contemplated hereby by either of the parties pursuant to Section 11.1, written notice thereof shall forthwith be given to all other parties, and this Agreement shall terminate (other than Sections 5.1(b), 13.8, 13.9, 13.10, 13.11, 13.12 and Article XII) and the transactions contemplated hereby shall be aban- doned, without further action by any of the parties hereto. If this Agreement is terminated as provided herein: (a) upon request therefor, each of the parties hereto will redeliver all documents, work papers and other material of the other parties relating to the transactions contemplated hereby, whether obtained before or after the execution hereof, to the party furnishing the same; (b) no party hereto shall have any lia- bility or further obligation to any other party to this Agreement pursuant to this Agreement except as stated in this Section 11.2; and (c) all filings, applications and other submissions made pursuant to the terms of this Agreement shall, to the extent practicable, be withdrawn from the agency or other Person to which made. 74

or the Controlling Shareholders, respectively, shall (i) fail to perform in any material respect its covenants and agreements contained herein required to be performed prior to the Closing Date, or (ii) materially breach any of their representations, warranties or covenants con- tained herein if such breach would cause a condition to the obligation of the terminating party to close not to be satisfied and if such failure to perform or breach has not been waived by the terminating party; provided, however, that a party's right to indemnification hereun- der shall not be affected by such party's waiver of its right of termination pursuant to this Section 11.1 if such right of termination arises from a willful breach of this Agreement. 11.2. Procedure and Effect of Termination. In the event of termination of this Agreement and abandon- ment of the transactions contemplated hereby by either of the parties pursuant to Section 11.1, written notice thereof shall forthwith be given to all other parties, and this Agreement shall terminate (other than Sections 5.1(b), 13.8, 13.9, 13.10, 13.11, 13.12 and Article XII) and the transactions contemplated hereby shall be aban- doned, without further action by any of the parties hereto. If this Agreement is terminated as provided herein: (a) upon request therefor, each of the parties hereto will redeliver all documents, work papers and other material of the other parties relating to the transactions contemplated hereby, whether obtained before or after the execution hereof, to the party furnishing the same; (b) no party hereto shall have any lia- bility or further obligation to any other party to this Agreement pursuant to this Agreement except as stated in this Section 11.2; and (c) all filings, applications and other submissions made pursuant to the terms of this Agreement shall, to the extent practicable, be withdrawn from the agency or other Person to which made. 74

ARTICLE XII DISPUTE RESOLUTION 12.1. Arbitration. In the event of a dispute among the parties with respect to the validity, intent, interpretation, performance, enforcement or arbitrability of any of the terms contained in this Agreement or any claim arising out of or in connection with this Agree- ment, except for disputes or claims involving the types of matters set forth in Section 12.2, such dispute or claim shall promptly be submitted for resolution to the Board of Directors of GModelo. If the G-Modelo Board of Directors, by a Qualified Vote, shall be unable to re- solve the dispute within 30 days, the Controlling Share- holders shall appoint a Controlling Shareholder Nominee and the Investor shall appoint an Investor Nominee to a special committee. The members of the special committee shall use their best efforts to reach an amicable resolu- tion of the dispute and any mutually acceptable resolu- tion shall be deemed final and binding and shall be implemented as soon as practicable. If the special committee is unable to resolve the dispute within 30 days after its appointment or, if either the Controlling Shareholders or A-B shall have failed to appoint a repre- sentative to the special committee, within 30 days after either the Controlling Shareholders or AB has appointed its representative, the matter shall be submitted for final resolution to an international arbitration panel consisting of three arbitrators selected as follows: the Chairman of A-B shall select one arbitrator; a majority of the Controlling Shareholders shall select one arbitra- tor; and the two arbitrators so appointed shall select a third arbitrator. The third arbitrator shall be the presiding arbitrator and may not be a citizen or resident of either the United States or Mexico and must be unaf- filiated with the parties hereto. In the event either the Controlling Shareholders or A-B shall have failed to select an arbitrator within 15 days after either the Controlling Shareholders or A-B has selected its arbi- trator or the two arbitrators so selected shall fail to agree on a third arbitrator, such arbitrator shall be selected by the United States Representative of the International Chamber of Commerce. The place of arbitra- tion shall be New York City, in the State of New York, the United States of America. All arbitrators shall be fluent in both the English and Spanish languages and 75

their award shall be rendered in English. The English language shall be used in all documents, briefs, evidence and any other writings submitted to the arbitration panel. All arbitration proceedings shall be conducted in the English language. The arbitration procedure set forth in this Section 12.1 shall be the sole and exclu- sive means of

ARTICLE XII DISPUTE RESOLUTION 12.1. Arbitration. In the event of a dispute among the parties with respect to the validity, intent, interpretation, performance, enforcement or arbitrability of any of the terms contained in this Agreement or any claim arising out of or in connection with this Agree- ment, except for disputes or claims involving the types of matters set forth in Section 12.2, such dispute or claim shall promptly be submitted for resolution to the Board of Directors of GModelo. If the G-Modelo Board of Directors, by a Qualified Vote, shall be unable to re- solve the dispute within 30 days, the Controlling Share- holders shall appoint a Controlling Shareholder Nominee and the Investor shall appoint an Investor Nominee to a special committee. The members of the special committee shall use their best efforts to reach an amicable resolu- tion of the dispute and any mutually acceptable resolu- tion shall be deemed final and binding and shall be implemented as soon as practicable. If the special committee is unable to resolve the dispute within 30 days after its appointment or, if either the Controlling Shareholders or A-B shall have failed to appoint a repre- sentative to the special committee, within 30 days after either the Controlling Shareholders or AB has appointed its representative, the matter shall be submitted for final resolution to an international arbitration panel consisting of three arbitrators selected as follows: the Chairman of A-B shall select one arbitrator; a majority of the Controlling Shareholders shall select one arbitra- tor; and the two arbitrators so appointed shall select a third arbitrator. The third arbitrator shall be the presiding arbitrator and may not be a citizen or resident of either the United States or Mexico and must be unaf- filiated with the parties hereto. In the event either the Controlling Shareholders or A-B shall have failed to select an arbitrator within 15 days after either the Controlling Shareholders or A-B has selected its arbi- trator or the two arbitrators so selected shall fail to agree on a third arbitrator, such arbitrator shall be selected by the United States Representative of the International Chamber of Commerce. The place of arbitra- tion shall be New York City, in the State of New York, the United States of America. All arbitrators shall be fluent in both the English and Spanish languages and 75

their award shall be rendered in English. The English language shall be used in all documents, briefs, evidence and any other writings submitted to the arbitration panel. All arbitration proceedings shall be conducted in the English language. The arbitration procedure set forth in this Section 12.1 shall be the sole and exclu- sive means of settling or resolving any dispute referred to in this Section 12.1. The arbitration shall be con- ducted in accordance with the UNCITRAL Arbitration Rules then in effect, as modified herein. The award of the arbitrators shall be final and binding on the parties and may be presented by any of the parties for enforcement in any court of competent jurisdiction and the parties hereby consent to the jurisdiction of such court solely for purposes of enforcement of this arbitration agreement and any award rendered hereunder. In any such enforcement action, irrespective of where it is brought, none of the parties will seek to invalidate or modify the deci- sion of the arbitrators or otherwise to invalidate or circumvent the procedures set forth in this Section 12.1 as the sole and exclusive means of settling or resolving such dispute, including by appeal to any court which would otherwise have jurisdiction in the matter. The fees of the arbitrators and the other costs of such arbitration shall be borne by the parties in such propor- tions as shall be specified in the arbitration award. 12.2. Business Disagreements. (a) In the event that at any time follow- ing the Closing there is a Fundamental Business Disagree- ment (as hereinafter defined), the Investor shall have the right to require (the "Dispute Right") that the Controlling Shareholders purchase all, but not less than all, of the shares of G-Modelo capital stock and the Diblo Common Shares then owned, directly or indirectly, by the Investor and its authorized designees, if any (such aggregate number of shares being referred to herein as the "Investor Shares"), at an aggregate purchase price (the "Investor Share Price") equal to the aggregate purchase price paid by the Investor and its authorized designees, if any, for the Investor Shares, payable in United States dollars in immediately available funds. The Investor shall exercise the Dispute Right by delivery of a written notice (the "Dispute Notice") to the Con- trolling Shareholders in accordance with Section 13.10 indicating that (i) there exists a Fundamental Business 76

their award shall be rendered in English. The English language shall be used in all documents, briefs, evidence and any other writings submitted to the arbitration panel. All arbitration proceedings shall be conducted in the English language. The arbitration procedure set forth in this Section 12.1 shall be the sole and exclu- sive means of settling or resolving any dispute referred to in this Section 12.1. The arbitration shall be con- ducted in accordance with the UNCITRAL Arbitration Rules then in effect, as modified herein. The award of the arbitrators shall be final and binding on the parties and may be presented by any of the parties for enforcement in any court of competent jurisdiction and the parties hereby consent to the jurisdiction of such court solely for purposes of enforcement of this arbitration agreement and any award rendered hereunder. In any such enforcement action, irrespective of where it is brought, none of the parties will seek to invalidate or modify the deci- sion of the arbitrators or otherwise to invalidate or circumvent the procedures set forth in this Section 12.1 as the sole and exclusive means of settling or resolving such dispute, including by appeal to any court which would otherwise have jurisdiction in the matter. The fees of the arbitrators and the other costs of such arbitration shall be borne by the parties in such propor- tions as shall be specified in the arbitration award. 12.2. Business Disagreements. (a) In the event that at any time follow- ing the Closing there is a Fundamental Business Disagree- ment (as hereinafter defined), the Investor shall have the right to require (the "Dispute Right") that the Controlling Shareholders purchase all, but not less than all, of the shares of G-Modelo capital stock and the Diblo Common Shares then owned, directly or indirectly, by the Investor and its authorized designees, if any (such aggregate number of shares being referred to herein as the "Investor Shares"), at an aggregate purchase price (the "Investor Share Price") equal to the aggregate purchase price paid by the Investor and its authorized designees, if any, for the Investor Shares, payable in United States dollars in immediately available funds. The Investor shall exercise the Dispute Right by delivery of a written notice (the "Dispute Notice") to the Con- trolling Shareholders in accordance with Section 13.10 indicating that (i) there exists a Fundamental Business 76

Disagreement, (ii) the number of Investor Shares to be purchased by the Controlling Shareholders, (iii) the Investor Share Price, and (iv) the date and time fixed for the consummation of such sale (which date shall not be less than twenty nor more than forty days following the date of the Investor Notice). (b) In the event that the Controlling Shareholders fail, refuse or are otherwise unable or un- willing to purchase the Investor Shares pursuant to subsection (a) above, the Controlling Shareholders shall notify the Investor (the "Controlling Shareholder Re- sponse Notice") of such determination within fifteen days following the date of the Dispute Notice, and the Inves- tor shall have the right to purchase all, but not less than all, of the shares of GModelo capital stock and Diblo Common Shares then owned by the Controlling Share- holders or held in trust for the benefit of the Control- ling Shareholders (the "Controlling Shareholder Shares") at an aggregate purchase price equal to the product of (i) the number of Controlling Shareholder Shares and (ii) that fraction having the Investor Price as the numerator and the aggregate number of Investor Shares as the denom- inator, payable in United States dollars in immediately available funds. The Investor shall notify the Control- ling Shareholders (the "Investor Response Notice") of its intention with respect to the purchase of the Controlling Shareholder Shares within fifteen days following the date of the Controlling Shareholder Response Notice. In the event the Investor elects to purchase the Controlling Shareholder Shares, the Investor Response Notice shall specify the date and time fixed for the consummation of such purchase (which date shall not be less than ten nor more than forty days following the Controlling Sharehold- er Response Notice). (c) For purposes of this Section 12.2, a "Fundamental Business Disagreement" shall mean a dis- agreement between A-B and the Controlling Shareholders over fundamental business direction, e.g., change in the charter or by-laws, change in dividend policy, corporate objectives, etc., including, but not limited to, dis- agreements relating to those matters with respect to which the Investor has minority shareholder protection as identified in Section 7.2. 77

Disagreement, (ii) the number of Investor Shares to be purchased by the Controlling Shareholders, (iii) the Investor Share Price, and (iv) the date and time fixed for the consummation of such sale (which date shall not be less than twenty nor more than forty days following the date of the Investor Notice). (b) In the event that the Controlling Shareholders fail, refuse or are otherwise unable or un- willing to purchase the Investor Shares pursuant to subsection (a) above, the Controlling Shareholders shall notify the Investor (the "Controlling Shareholder Re- sponse Notice") of such determination within fifteen days following the date of the Dispute Notice, and the Inves- tor shall have the right to purchase all, but not less than all, of the shares of GModelo capital stock and Diblo Common Shares then owned by the Controlling Share- holders or held in trust for the benefit of the Control- ling Shareholders (the "Controlling Shareholder Shares") at an aggregate purchase price equal to the product of (i) the number of Controlling Shareholder Shares and (ii) that fraction having the Investor Price as the numerator and the aggregate number of Investor Shares as the denom- inator, payable in United States dollars in immediately available funds. The Investor shall notify the Control- ling Shareholders (the "Investor Response Notice") of its intention with respect to the purchase of the Controlling Shareholder Shares within fifteen days following the date of the Controlling Shareholder Response Notice. In the event the Investor elects to purchase the Controlling Shareholder Shares, the Investor Response Notice shall specify the date and time fixed for the consummation of such purchase (which date shall not be less than ten nor more than forty days following the Controlling Sharehold- er Response Notice). (c) For purposes of this Section 12.2, a "Fundamental Business Disagreement" shall mean a dis- agreement between A-B and the Controlling Shareholders over fundamental business direction, e.g., change in the charter or by-laws, change in dividend policy, corporate objectives, etc., including, but not limited to, dis- agreements relating to those matters with respect to which the Investor has minority shareholder protection as identified in Section 7.2. 77

ARTICLE XIII MISCELLANEOUS 13.1. Survival of Representations, Warranties and Covenants. All representations and warranties of the parties hereto contained in this Agreement shall survive the Closing Date, regardless of any investigation made by the parties hereto, for a period ending on the third anniversary of the Closing Date, except that the repre- sentations and warranties set forth in Sections 3.1, 3.2, 3.3, 3.4 and 4.1 shall survive indefinitely and the representations and warranties set forth in Section 3.13 and, to the extent the representations and warranties set forth in Section 3.8 relate to liabilities for Taxes, Section 3.8 shall survive until the later of the applica- ble statutes of limitation or the final resolution of all issues arising under Section 3.13 and Section 3.8. The covenants and agreements contained herein to be performed or complied with after the Closing shall survive without limitation as to time, unless the covenant or agreement specifies a term, in which case such covenant or agree- ment shall survive for a period of three years following the expiration of such specified term and shall thereupon expire. The respective expiration dates for the survival of the representations and warranties and the covenants shall be referred to herein as the "Expiration Date." 13.2. Entire Agreement. This Agreement, including the Exhibits and disclosure schedules hereto and the other agreements, documents and instruments referred to herein constitute the sole understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings of the parties hereto with respect to the transactions contem- plated by this Agreement, including without limitation the Heads of Agreement. 13.3. Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective parties hereto and their respective successors and permitted assigns; provided, however, that neither this Agreement nor any of the rights, obligations or interests hereunder shall be assigned by any party without the prior written consent of the other parties hereto; and provided, further, that no assignment of this Agreement or any of the rights,

ARTICLE XIII MISCELLANEOUS 13.1. Survival of Representations, Warranties and Covenants. All representations and warranties of the parties hereto contained in this Agreement shall survive the Closing Date, regardless of any investigation made by the parties hereto, for a period ending on the third anniversary of the Closing Date, except that the repre- sentations and warranties set forth in Sections 3.1, 3.2, 3.3, 3.4 and 4.1 shall survive indefinitely and the representations and warranties set forth in Section 3.13 and, to the extent the representations and warranties set forth in Section 3.8 relate to liabilities for Taxes, Section 3.8 shall survive until the later of the applica- ble statutes of limitation or the final resolution of all issues arising under Section 3.13 and Section 3.8. The covenants and agreements contained herein to be performed or complied with after the Closing shall survive without limitation as to time, unless the covenant or agreement specifies a term, in which case such covenant or agree- ment shall survive for a period of three years following the expiration of such specified term and shall thereupon expire. The respective expiration dates for the survival of the representations and warranties and the covenants shall be referred to herein as the "Expiration Date." 13.2. Entire Agreement. This Agreement, including the Exhibits and disclosure schedules hereto and the other agreements, documents and instruments referred to herein constitute the sole understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings of the parties hereto with respect to the transactions contem- plated by this Agreement, including without limitation the Heads of Agreement. 13.3. Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective parties hereto and their respective successors and permitted assigns; provided, however, that neither this Agreement nor any of the rights, obligations or interests hereunder shall be assigned by any party without the prior written consent of the other parties hereto; and provided, further, that no assignment of this Agreement or any of the rights, 78 obligations or interests hereof shall relieve the assign- or of its obligations under this Agreement. Notwithstanding anything to the contrary contained in this Section 13.3, each of A-B, A-BI and the Investor may assign any or all of its rights or obligations hereunder to each other or to a Subsidiary without the prior writ- ten consent of the G-Modelo Signatories; provided, however, that such Subsidiary shall agree in writing to be bound by the terms and conditions of this Agreement, that such assignment shall in no way limit or relieve any of them of any of their obligations hereunder and that such Subsidiary remains a Subsidiary of A-B. 13.4. Counterparts. This Agreement may be executed in counterparts, each of which shall for all purposes be deemed to be an original and all of which shall, taken together, constitute the same instrument. 13.5. Interpretation. The table of contents and article and section headings contained in this Agree- ment are solely for reference, shall not be deemed to constitute part of this Agreement, and shall not affect the interpretation hereof. 13.6. Amendment and Modification. Subject to applicable law, this Agreement may be amended, modified or supplemented only by written agreement of each of the parties hereto with respect to any of the terms contained herein. 13.7. Waiver of Compliance; Consents. Except as otherwise provided in this Agreement, any failure of any of the parties to comply with any obligation, cove- nant, agreement or condition herein may be waived by the parties entitled to the benefits thereof only by a writ- ten instrument signed by such parties granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. When- ever this Agreement requires or permits consent by or on behalf of any of the parties hereto, such consent shall be given in writing in a

obligations or interests hereof shall relieve the assign- or of its obligations under this Agreement. Notwithstanding anything to the contrary contained in this Section 13.3, each of A-B, A-BI and the Investor may assign any or all of its rights or obligations hereunder to each other or to a Subsidiary without the prior writ- ten consent of the G-Modelo Signatories; provided, however, that such Subsidiary shall agree in writing to be bound by the terms and conditions of this Agreement, that such assignment shall in no way limit or relieve any of them of any of their obligations hereunder and that such Subsidiary remains a Subsidiary of A-B. 13.4. Counterparts. This Agreement may be executed in counterparts, each of which shall for all purposes be deemed to be an original and all of which shall, taken together, constitute the same instrument. 13.5. Interpretation. The table of contents and article and section headings contained in this Agree- ment are solely for reference, shall not be deemed to constitute part of this Agreement, and shall not affect the interpretation hereof. 13.6. Amendment and Modification. Subject to applicable law, this Agreement may be amended, modified or supplemented only by written agreement of each of the parties hereto with respect to any of the terms contained herein. 13.7. Waiver of Compliance; Consents. Except as otherwise provided in this Agreement, any failure of any of the parties to comply with any obligation, cove- nant, agreement or condition herein may be waived by the parties entitled to the benefits thereof only by a writ- ten instrument signed by such parties granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. When- ever this Agreement requires or permits consent by or on behalf of any of the parties hereto, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth in this Section 13.7. 79 13.8. Broker's Fees. Each of A-B, A-BI, the Investor, the G-Modelo Signatories, the Banamex Trust and the Option Trust (a) represents and warrants that, it has not taken and will not take any action that would cause the other parties to have any obligation or liability to any Person for a finder's or broker's fee, and (b) agrees to indemnify the other parties for breach of the forego- ing representation and warranty, whether or not the Closing occurs. 13.9. Expenses. Whether or not the transac- tions contemplated hereby are consummated, each of the Controlling Shareholders, G-Modelo, the G-Modelo Corpora- tions, A-B, A-BI and the Investor shall pay all costs and expenses incurred by it, or on its behalf, in connection with this Agreement and the transactions contemplated hereby, including, without limiting the generality of the foregoing, fees and expenses of its own financial consul- tants, accountants and counsel. 13.10. Notices. Any notice, request, instruc- tion or other document permitted or required to be given hereunder by any party hereto to any other party shall be in writing and delivered personally or by facsimile transmission or sent by registered or certified mail, postage prepaid, as follows: if to G-Modelo or a G-Modelo Corporation, to: Grupo Modelo, S.A. de C.V. Campos Eliseos 400 11000 Mexico, D.F. Attention: Chairman of the Board Telephone No.: 011-52-5-281-0114 Facsimile No.: 011-52-5-280-5322 with a copy to: Santamarina Y Steta, S.C.

13.8. Broker's Fees. Each of A-B, A-BI, the Investor, the G-Modelo Signatories, the Banamex Trust and the Option Trust (a) represents and warrants that, it has not taken and will not take any action that would cause the other parties to have any obligation or liability to any Person for a finder's or broker's fee, and (b) agrees to indemnify the other parties for breach of the forego- ing representation and warranty, whether or not the Closing occurs. 13.9. Expenses. Whether or not the transac- tions contemplated hereby are consummated, each of the Controlling Shareholders, G-Modelo, the G-Modelo Corpora- tions, A-B, A-BI and the Investor shall pay all costs and expenses incurred by it, or on its behalf, in connection with this Agreement and the transactions contemplated hereby, including, without limiting the generality of the foregoing, fees and expenses of its own financial consul- tants, accountants and counsel. 13.10. Notices. Any notice, request, instruc- tion or other document permitted or required to be given hereunder by any party hereto to any other party shall be in writing and delivered personally or by facsimile transmission or sent by registered or certified mail, postage prepaid, as follows: if to G-Modelo or a G-Modelo Corporation, to: Grupo Modelo, S.A. de C.V. Campos Eliseos 400 11000 Mexico, D.F. Attention: Chairman of the Board Telephone No.: 011-52-5-281-0114 Facsimile No.: 011-52-5-280-5322 with a copy to: Santamarina Y Steta, S.C. Edif. "Omega" Campos Eliseos 345, 2nd Floor Col. Chapultepec Polanco 11560 Mexico, D.F. Attention: Lic. Agustin Santamarina Telephone No.: 011-52-5-281-4198 Facsimile No.: 011-52-5-280-6226

if to a Controlling Shareholder, to such Controlling Shareholder: c/o Grupo Modelo, S.A. de C.V. Campos Eliseos 400 11000 Mexico, D.F. Attention: Chairman of the Board Telephone No.: 011-52-5-281-0114 Facsimile No.: 011-52-5-280-5322 with a copy to: Santamarina Y Steta, S.C. Edif. "Omega" Campos Eliseos 345, 2nd Floor Col. Chapultepec Polanco 11560 Mexico, D.F. Attention: Lic. Agustin Santamarina Telephone No.: 011-52-5-281-4198

if to a Controlling Shareholder, to such Controlling Shareholder: c/o Grupo Modelo, S.A. de C.V. Campos Eliseos 400 11000 Mexico, D.F. Attention: Chairman of the Board Telephone No.: 011-52-5-281-0114 Facsimile No.: 011-52-5-280-5322 with a copy to: Santamarina Y Steta, S.C. Edif. "Omega" Campos Eliseos 345, 2nd Floor Col. Chapultepec Polanco 11560 Mexico, D.F. Attention: Lic. Agustin Santamarina Telephone No.: 011-52-5-281-4198 Facsimile No.: 011-52-5-280-6226 if to A-B, A-BI or the Investor, to: Anheuser-Busch Companies, Inc. One Busch Place St. Louis, Missouri 63118 Attention: Vice President and General Counsel Telephone No.: 95-314-577-2000 Facsimile No.: 95-314-577-0776 with a copy to: Skadden, Arps, Slate, Meagher & Flom 919 Third Avenue New York, New York 10022 Attention: J. Michael Schell, Esq. Telephone No.: 95-212-735-3000 Facsimile No.: 95-212-735-2001 with a further copy to: Creel, Garcia-Cuellar Y Muggenburg Bosque de Ciruelos 304, Piso 2 Bosque de Las Lomas 11700 Mexico, D.F. Attention: Lic. Samuel Garcia-Cuellar 81

Telephone No.: 011-52-5-596-1017 Facsimile No.: 011-52-5-596-3309 if to the Option Trustee or the Banamex Trust- ee, to: Banco Nacional de Mexico, S.A., Trust Division Paseo de la Reforma No. 404, 14th Floor Col. Juarez 06600 Mexico, D.F.

Telephone No.: 011-52-5-596-1017 Facsimile No.: 011-52-5-596-3309 if to the Option Trustee or the Banamex Trust- ee, to: Banco Nacional de Mexico, S.A., Trust Division Paseo de la Reforma No. 404, 14th Floor Col. Juarez 06600 Mexico, D.F. Attention: Sr. Eduardo Alvarez Morales Sr. Fernando Montes de Oca Telephone No.: 011-52-5-225-9733 Facsimile No.: 011-52-5-225-9751 or at such other address for a party as shall be speci- fied by like notice. Any notice which is delivered personally in the manner provided herein or by facsimile transmission shall be deemed to have been duly given to the party to whom it is directed upon actual receipt by such party. Any notice which is addressed and mailed in the manner herein provided shall be conclusively presumed to have been duly given to the party to which it is addressed at the close of business, local time of the recipient, on the third day after the day it is so placed in the mail. 13.11. Governing Law. This Agreement shall be construed in accordance with and governed by the laws in force in the United Mexican States without regard to the conflict of laws provisions thereof. 13.12. Public Announcements. Except as may be required by law, none of the parties hereto shall make and the Controlling Shareholders shall ensure that no G- Modelo Corporation makes any public statements, includ- ing, without limitation, any press release, with respect to this Agreement or the transactions contemplated hereby without prior consultation and opportunity to comment being afforded to the other parties. 82

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed on its behalf as of the date first above written. ANHEUSER-BUSCH COMPANIES, INC.
By: s/AUGUST A. BUSCH III -------------------------Name: Title:

ANHEUSER-BUSCH INTERNATIONAL, INC.
By: s/JOHN H. PURNELL --------------------------Name: Title:

ANHEUSER-BUSCH INTERNATIONAL HOLDINGS, INC.
By: s/JESSE AGUIRRE ---------------------------Name: Title:

GRUPO MODELO, S.A. de C.V.

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed on its behalf as of the date first above written. ANHEUSER-BUSCH COMPANIES, INC.
By: s/AUGUST A. BUSCH III -------------------------Name: Title:

ANHEUSER-BUSCH INTERNATIONAL, INC.
By: s/JOHN H. PURNELL --------------------------Name: Title:

ANHEUSER-BUSCH INTERNATIONAL HOLDINGS, INC.
By: s/JESSE AGUIRRE ---------------------------Name: Title:

GRUPO MODELO, S.A. de C.V.
By: s/ANTONINO FERNANDEZ R. ---------------------------Name: Title:

DIBLO, S.A. de C.V.
By: s/ANTONINO FERNANDEZ R. ---------------------------Name: Title:

83

BANCO NACIONAL DE MEXICO, S.A., AS TRUSTEE OF THE OPTION TRUST
By: s/LIC EDUARDO ALVAREZ MORALES ---------------------------Lic. Eduardo Alvarez Morales, as trustee delegate u/a dated June 11, 1993 By: s/FERNANDO MONTES DE OCA ---------------------------Fernando Montes de Oca, as trustee delegate u/a dated June 11, 1993

BANCO NACIONAL DE MEXICO, S.A., AS TRUSTEE OF THE OPTION TRUST
By: s/LIC EDUARDO ALVAREZ MORALES ---------------------------Lic. Eduardo Alvarez Morales, as trustee delegate u/a dated June 11, 1993 By: s/FERNANDO MONTES DE OCA ---------------------------Fernando Montes de Oca, as trustee delegate u/a dated June 11, 1993

BANCO NACIONAL DE MEXICO, S.A., AS TRUSTEE OF THE BANAMEX TRUST
By: s/LIC EDUARDO ALVAREZ MORALES ---------------------------Lic. Eduardo Alvarez Morales, as trustee delegate u/a dated June 11, 1993. By: s/FERNANDO MONTES DE OCA ---------------------------Fernando Montes de Oca, as trustee delegate u/a dated June 11, 1993

s/ANTONINO FERNANDEZ R. -------------------------------Antonino Fernandez R., on his own behalf and as a member of the technical committee of the Control Trust

s/PABLO ARAMBURUZABALA -------------------------------Pablo Aramburuzabala, on his own behalf and as a member of the technical committee of the Control Trust

s/NEMESIO DIEZ R. -------------------------------Nemesio Diez R., on his own behalf and as a member of the technical committee of the Control Trust

84
s/JUAN SANCHEZ-NAVARRO Y P. ---------------------------------Juan Sanchez-Navarro y P., on his own behalf and as a member of the technical committee of the Control Trust

s/VALENTIN DIEZ M. ---------------------------------Valentin Diez M., on his own be-

s/JUAN SANCHEZ-NAVARRO Y P. ---------------------------------Juan Sanchez-Navarro y P., on his own behalf and as a member of the technical committee of the Control Trust

s/VALENTIN DIEZ M. ---------------------------------Valentin Diez M., on his own behalf and as a member of the technical committee of the Control Trust

s/PABLO GONZALEZ DIEZ ---------------------------------Pablo Gonzalez Diez, on his own behalf and as a member of the technical committee of the Control Trust

s/LUIS GONZALEZ DIEZ ---------------------------------Luis Gonzalez Diez, on his own behalf and as a member of the technical committee of the Control Trust

s/CESAREO GONZALEZ DIEZ ---------------------------------Cesareo Gonzalez Diez, on his own behalf and as a member of the technical committee of the Control Trust

s/THELMA YATES VDA DE ALVAREZ LOYO ---------------------------------Thelma Yates Vda. de Alvarez Loyo

85
s/EUSICINIA GONZALEZ DIEZ -------------------------------Eusicinia Gonzalez Diez

s/ROSARIO GONZALEZ DIEZ -------------------------------Rosario Gonzalez Diez

s/MA PAULINA GONZALEZ DIEZ -------------------------------Ma. Paulina Gonzalez Diez

s/EUSICINIA GONZALEZ DIEZ -------------------------------Eusicinia Gonzalez Diez

s/ROSARIO GONZALEZ DIEZ -------------------------------Rosario Gonzalez Diez

s/MA PAULINA GONZALEZ DIEZ -------------------------------Ma. Paulina Gonzalez Diez

s/ELEUTERIA GONZALEZ DIEZ -------------------------------Eleuteria Gonzalez Diez

s/LAURENTINO GARCIA GONZALEZ -------------------------------Laurentino Garcia Gonzalez

s/MA ANTONIA GARCIA GONZALEZ -------------------------------Ma. Antonia Garcia Gonzalez

s/MA TERESA GARCIA GONZALEZ -------------------------------Ma. Teresa Garcia Gonzalez

86

EX-10.20 January 24, 1994 Antonino Fernandez R. Grupo Modelo, S.A. de C.V. Campos Eliseos 400 11000 Mexico, D.F. Dear Don Antonino: This letter shall serve to confirm the understanding and agreement between A-B and the Controlling Shareholders regarding Section 5.5 of the Investment Agreement, which reads as follows: "5.5 Election of A-B Director. The Controlling Shareholders shall be entitled to designate a G-Modelo director for election to the A-B Board of Directors. Following such designation, A-B will use its best efforts to nominate and cause such designee to be elected to the A-B Board of Directors at the Annual Meeting of Shareholders of A-B next succeeding such designation and to continue to nominate and cause such a designee to be elected for so long as the Investor owns ten percent or more of the total outstanding shares of G-Modelo capital stock." It is acknowledged and agreed that Anheuser-Busch fulfilled its obligations under Section 5.5 when Pablo Aramburuzabala was appointed to the A-B Board as a Class 1 Director, with a term continuing until the Annual Meeting of Shareholders in 1995. A-B will use its best efforts to cause Pablo Aramburuzabala (or another designee of the Controlling Shareholders) to be nominated and elected to the A-B Board at the Annual Meeting of Shareholders in 1995 and future years as long as the Investor owns ten percent or more of the total

EX-10.20 January 24, 1994 Antonino Fernandez R. Grupo Modelo, S.A. de C.V. Campos Eliseos 400 11000 Mexico, D.F. Dear Don Antonino: This letter shall serve to confirm the understanding and agreement between A-B and the Controlling Shareholders regarding Section 5.5 of the Investment Agreement, which reads as follows: "5.5 Election of A-B Director. The Controlling Shareholders shall be entitled to designate a G-Modelo director for election to the A-B Board of Directors. Following such designation, A-B will use its best efforts to nominate and cause such designee to be elected to the A-B Board of Directors at the Annual Meeting of Shareholders of A-B next succeeding such designation and to continue to nominate and cause such a designee to be elected for so long as the Investor owns ten percent or more of the total outstanding shares of G-Modelo capital stock." It is acknowledged and agreed that Anheuser-Busch fulfilled its obligations under Section 5.5 when Pablo Aramburuzabala was appointed to the A-B Board as a Class 1 Director, with a term continuing until the Annual Meeting of Shareholders in 1995. A-B will use its best efforts to cause Pablo Aramburuzabala (or another designee of the Controlling Shareholders) to be nominated and elected to the A-B Board at the Annual Meeting of Shareholders in 1995 and future years as long as the Investor owns ten percent or more of the total outstanding shares of G-Modelo capital stock. Capitalized terms used in this letter shall have the meaning given such terms in the Investment Agreement. Please indicate the Controlling Shareholders' agreement with the foregoing by signing and returning the attached copy. Sincerely, ANHEUSER-BUSCH COMPANIES, INC.
S/JOHN H. PURNELL - - - -------------------------------------------John H. Purnell, Vice President and Group Executive

ACKNOWLEDGED AND AGREED as of the date above.
s/ANTONINO FERNANDEZ R. - - - --------------------------------------------Antonino Fernandez R., on behalf of the Controlling Shareholders

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION INTRODUCTION This discussion summarizes the significant factors affecting the consolidated operating results, financial condition and liquidity/cash flows of Anheuser-Busch Companies, Inc. during the three-year period ended December 31, 1993. This discussion should be read in conjunction with the Letter to Shareholders, financial statements and financial statement footnotes included in this annual report. Two unusual occurrences had negative impacts on the THE PROFITABILITY company's 1993 earnings. In September 1993, the company PROGRAM IS EXPECTED announced a Profitability Enhancement Program which TO GENERATE COST includes significant organizational and operational SAVINGS OF MORE

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION INTRODUCTION This discussion summarizes the significant factors affecting the consolidated operating results, financial condition and liquidity/cash flows of Anheuser-Busch Companies, Inc. during the three-year period ended December 31, 1993. This discussion should be read in conjunction with the Letter to Shareholders, financial statements and financial statement footnotes included in this annual report. Two unusual occurrences had negative impacts on the THE PROFITABILITY company's 1993 earnings. In September 1993, the company PROGRAM IS EXPECTED announced a Profitability Enhancement Program which TO GENERATE COST includes significant organizational and operational SAVINGS OF MORE changes to improve sales and profitability. The Program THAN $100 MILLION includes the following elements: A YEAR BY 1997. - An enhanced retirement program for salaried employees - The write-down of underperforming assets and investments - The restructuring and reorganization of the company This Program is expected to generate cost savings of more than $100 million in 1994 and $400 million a year by 1997. The restructuring and reorganization element of the Program includes the following initiatives designed to increase efficiencies and reduce operating costs: - Brewery modernization programs based on the successful practices employed at the company's newer breweries. Such Programs include increased employee involvement to improve quality and efficiency throughout the entire 13-brewery system. - Relocation of the company's food products operations to St. Louis. Additionally, bakery facilities will be modernized and consolidated. The Program is also designed to improve sales of the company's premium beer products through aggressive advertising and the introduction of new products. The company's newest product, Ice Draft from Budweiser, was rolled out nationwide in January 1994. As a result of the Program, the company recognized a $565 million ($1.26 per share) restructuring charge during the third quarter 1993. Further information concerning the details of the restructuring charge is included in Note 2 to the Consolidated Financial Statements. Additionally, the Revenue Reconciliation Act of 1993, signed into law during the third quarter 1993, increased the corporate federal statutory income tax rate by one percentage point retroactive to January 1, 1993. This retroactive income tax rate increase resulted in a $33 million, or $.12 per share, non- recurring after-tax, noncash charge related to revaluation of the deferred tax liability in accordance with Financial Accounting Standard No. 109 (FAS 109)- Accounting for Income Taxes. The non-recurring restructuring charge and the non- recurring deferred tax revaluation charge distort comparability of 1993 and 1992 reported financial results. To facilitate evaluation and understanding of the company's 1993 financial results, key financial comparisons affected by these charges are disclosed in this discussion both including and excluding the charges. Earnings for 1992 were impacted by the adoption of new accounting principles. Effective January 1, 1992 as discussed in Note 3 to the Consolidated Financial Statements, the company adopted the financial accounting standards for postretirement benefits (FAS 106) and income taxes (FAS 109). The company elected to immediately recognize the cumulative effect of adoption of FAS 106/109 pertaining to years prior to 1992 through a one-time cumulative effect adjustment which decreased 1992 net income and earnings per share by $76.7 million and $.26, respectively. These amounts are separately identified in the company's consolidated 1992 income statement. Implementation of FAS 106 in 1992 was based on benefit levels in effect at the time of adoption. Certain changes to these benefit levels were implemented in 1993, thereby reducing the FAS 106 pretax expense amount in 1993 as compared to 1992 by $27.0 million to $48.3 million. 32

OPERATIONS SALES
Anheuser-Busch Companies, Inc. achieved record gross sales during 1993 of $13.19 billion, an increase of $123 million or nine-tenths of one percent (.9%) over 1992 gross sales of $13.06 billion. Gross sales for 1992 were 3.4% higher than 1991. Gross sales for 1991

OPERATIONS SALES
Anheuser-Busch Companies, Inc. achieved record gross sales during 1993 of $13.19 billion, an increase of $123 million or nine-tenths of one percent (.9%) over 1992 gross sales of $13.06 billion. Gross sales for 1992 were 3.4% higher than 1991. Gross sales for 1991 were $12.63 billion, an increase of 8.8% over 1990. However, gross sales for 1991 are not comparable to 1990 as a result of the 100% increase in the federal excise tax on beer effective January 1, 1991. Gross sales includes $1.68 billion, $1.67 billion and $1.64 billion, respectively, in federal and state excise taxes for 1993, 1992 and 1991. Net sales for 1993 were also a record $11.51 billion, an increase of $111.6 million or one percent (1.0%) over 1992 net sales of $11.39 billion. Net sales for 1992 were 3.6% higher than 1991. Net sales during 1991 were $11.0 billion, an increase of 2.4% over 1990. The increase in gross and net sales in 1993 as compared to 1992 was due to higher beer volume sales as well as higher sales by the company's entertainment subsidiaries. Net revenue per barrel declined approximately 1% in 1993 due primarily to competitive pricing, brand and packaging mix shifts and geographic trends. Additionally, beer pricing was very competitive in 1993 as competitive promotional activity increased due to modest industry growth and efforts to protect volume impacted by a weak economy in key beer-selling states. Anheuser-Busch, Inc., the company's brewing subsidiary and largest contributor to consolidated sales and profits, sold an industry record of 87.3 million barrels of beer in 1993, an increase of onehalf of one percent (.5%) compared to 1992 beer volume of 86.8 million barrels. The company's 1993 beer volume gains, built from the largest volume base in the industry, were achieved despite the continued severe economic weakness in key selling areas along the West Coast. In April 1993, the company instituted the "Proud To Be Your Bud" campaign featuring new advertising and merchandising programs and a wholesaler sales incentive program designed to increase premium beer sales. The success of this campaign has contributed to an overall beer sales-to-retailers increase of more than 1.5% from May through December versus the same period last year. Considering the competitive conditions in the beer industry, the company's premium beer brands performed well during 1993. Budweiser continues to dominate across all demographic segments. Bud Light had another excellent year in 1993 with double-digit growth. Bud Light continues to outpace its major competitor and is well-positioned to become the leading light-beer brand in the United States. In October 1993, Anheuser-Busch introduced a new premium product-Ice Draft from Budweiser-to consumers in the western United States. The company completed the national rollout of Ice Draft in January 1994. During 1993, the company's sales and volume growth was impacted by slower regional economic recovery which generated more intensive price competition in key markets. During 1994, the company plans to enhance premium brand volume growth through aggressive marketing, the national rollout of Ice Draft and price increases below the consumer price index. The company's 1994 quarterly beer sales volume growth is not expected to follow a consistent pattern. First quarter beer volume will increase more significantly compared to 1993 due to the rollout of

[PHOTO]

[SALES GRAPH]

significantly compared to 1993 due to the rollout of Ice Draft and higher planned inventory levels. Consistent with past practice, wholesaler inventory levels will be raised prior to the February 28 expiration of the labor contract affecting the majority of the company's beer production employees. Negotiations are progressing, and the company expects to reach final agreement with the union soon.

33

FINANCIAL REVIEW
The increase in gross and net sales in 1992 as compared to 1991 was due to higher beer volume, higher revenue per barrel and higher sales by the company's food products and entertainment subsidiaries. The increase in gross and net sales in 1991 as compared to 1990 was due to higher revenue per barrel and higher sales by the company's food products subsidiaries. Beer volume sales for 1992 were a one percent increase over 1991 beer volume of 86.0 million barrels. This increase was achieved despite poor economic conditions and the second-coolest summer in two decades. The company's 1991 beer sales volume was 86.0 million barrels, a slight decrease of 462,000 barrels, or five-tenths of a percent, compared to 1990 beer volume of 86.5 million barrels. The sales volume decline was due to higher beer prices to consumers reflecting the 100% increase in the federal excise tax effective January 1, 1991. The company's sales volume decline in 1991 was considerably less than the 2.0% volume decline for the brewing industry as a whole. Anheuser-Busch, Inc. maintained its market share in 1993, with sales volume representing approximately 44.3% of total brewing industry sales in the U.S. (including imports and nonalcohol brews), as estimated based on information provided by The Beer Institute. The 1992 market share amount was four-tenths of one percent (.4%) of a share point higher than 1991. Market share for 1991 was 43.9%, a five-tenths of one percent (.5%) share point increase over 1990. Anheuser-Busch has led the brewing industry in market share every year since 1957. The company began production at its 13th brewery in the spring of 1993 in Cartersville, Ga. The Cartersville brewery is the most modern and efficient of the company's breweries and is currently operating at approximately one-half its ultimate capacity. When fully operational, the Cartersville brewery will be able to provide up to 6.5 million barrels of capacity. COST OF PRODUCTS AND SERVICES Cost of products and services for 1993 was $7.42 billion, a 1.5% increase over the $7.31 billion amount reported for 1992. This increase follows a 2.2% and .8% increase in 1992 and 1991, respectively. These increases primarily relate to higher production costs for the company's brewing subsidiary and other beer-related operations, higher attendance at the company's entertainment operations in 1993 and higher sales of the company's food products

ANHEUSER-BUSCH, INC. MAINTAINED ITS MARKET SHARE IN 1993, WITH SALES VOLUME REPRESENTING APPROXIMATELY 44.3% OF TOTAL BREWING INDUSTRY SALES IN THE U.S.

[TOTAL PAYROLL COST GRAPH]

FINANCIAL REVIEW
The increase in gross and net sales in 1992 as compared to 1991 was due to higher beer volume, higher revenue per barrel and higher sales by the company's food products and entertainment subsidiaries. The increase in gross and net sales in 1991 as compared to 1990 was due to higher revenue per barrel and higher sales by the company's food products subsidiaries. Beer volume sales for 1992 were a one percent increase over 1991 beer volume of 86.0 million barrels. This increase was achieved despite poor economic conditions and the second-coolest summer in two decades. The company's 1991 beer sales volume was 86.0 million barrels, a slight decrease of 462,000 barrels, or five-tenths of a percent, compared to 1990 beer volume of 86.5 million barrels. The sales volume decline was due to higher beer prices to consumers reflecting the 100% increase in the federal excise tax effective January 1, 1991. The company's sales volume decline in 1991 was considerably less than the 2.0% volume decline for the brewing industry as a whole. Anheuser-Busch, Inc. maintained its market share in 1993, with sales volume representing approximately 44.3% of total brewing industry sales in the U.S. (including imports and nonalcohol brews), as estimated based on information provided by The Beer Institute. The 1992 market share amount was four-tenths of one percent (.4%) of a share point higher than 1991. Market share for 1991 was 43.9%, a five-tenths of one percent (.5%) share point increase over 1990. Anheuser-Busch has led the brewing industry in market share every year since 1957. The company began production at its 13th brewery in the spring of 1993 in Cartersville, Ga. The Cartersville brewery is the most modern and efficient of the company's breweries and is currently operating at approximately one-half its ultimate capacity. When fully operational, the Cartersville brewery will be able to provide up to 6.5 million barrels of capacity. COST OF PRODUCTS AND SERVICES Cost of products and services for 1993 was $7.42 billion, a 1.5% increase over the $7.31 billion amount reported for 1992. This increase follows a 2.2% and .8% increase in 1992 and 1991, respectively. These increases primarily relate to higher production costs for the company's brewing subsidiary and other beer-related operations, higher attendance at the company's entertainment operations in 1993 and higher sales of the company's food products subsidiaries. The increase in 1992 over 1991 is also due to the 1992 adoption of FAS 106. Such increases, however, have been partially offset by the company' ongoing productivity improvement and cost reduction programs as well as favorable packaging costs. As a percent of net sales, cost of products and services was 64.5% in 1993 as compared to 64.2% in 1992 and 65.0% in 1991.

ANHEUSER-BUSCH, INC. MAINTAINED ITS MARKET SHARE IN 1993, WITH SALES VOLUME REPRESENTING APPROXIMATELY 44.3% OF TOTAL BREWING INDUSTRY SALES IN THE U.S.

[TOTAL PAYROLL COST GRAPH]

MARKETING, DISTRIBUTION AND ADMINISTRATIVE EXPENSES

Marketing, distribution and administrative expenses for 1993 were $2.31 billion, even with 1992 levels. Expenses for 1993 benefited from lower postretirement medical costs and the divestiture of the company's Newark wholesale operation. The 1993 level compares to increases of 8.6% for 1992 and 3.7% for 1991. Marketing, distribution and administrative expenses increased in 1992 and 1991 as a result of the higher level of marketing activity, continuing development of new products and beer brands together with related new advertising and marketing programs, the intro-

duction of new entertainment attractions, and the adoption of FAS 106 in 1992. Areas significantly affected by these factors since 1990 include media advertising, point-of-sale materials and developmental expenses associated with new advertising and marketing programs for established as well as new products, payroll and related costs, business taxes, depreciation, supplies, and general operating expenses. [PHOTO] TAXES AND PAYROLL COSTS The company is significantly impacted by federal, state and local taxes. Taxes applicable to 1993 operations (not including the many indirect taxes included in materials and services purchased) totaled $2.41 billion and highlight the burden of taxation on the company and the brewing industry in general. Taxes for 1993 decreased $149.3 million or 5.8% over 1992 taxes of $2.56 billion. This decrease follows increases of 3.5% in 1992 and 53.1% in 1991. The decrease in total taxes for 1993 is due primarily to the company's lower earnings level as a result of the restructuring charge offset partially by an increase in beer sales volume, the FAS 109 deferred tax revaluation adjustment and the 1% increase in the federal statutory income tax rate effective January 1, 1993. The increase for 1992 over 1991 results principally from the company's increase in beer sales volume and higher earnings level. The increase in total taxes for 1991 over 1990 substantially results from increased beer excise taxes related to the 100% increase in the federal excise tax on beer effective January 1, 1991. Payroll costs during 1993 totaled $2.48 billion, an increase of $46.2 million or 1.9% over 1992 payroll costs of $2.44 billion. Payroll costs increased 6.7% in 1992 and 4.4% in 1991. The increase in payroll costs reflects the 1992 adoption of FAS 106 and normal increases in salary and wage rates and benefit costs. Payroll costs for 1993 exclude severance pay and other costs associated with the company's enhanced retirement program. Salaries and wages paid during 1993 totaled $1.97 billion. Pension, life insurance and health care benefits amounted to $333.8 million and payroll taxes were $174.7 million. Employment at December 31, 1993 was 43,345 compared to 44,790 at December 31, 1992, reflecting approximately 1,200 employees who accepted the enhanced retirement program. At the time of publication of this annual report, the company's national labor contract with the Brewery Conference of the International Brotherhood of Teamsters, representing the majority of brewery workers, was scheduled to expire February 28, 1994. The company and union representatives have been negotiating the terms of a new labor contract for the past several months, substantive progress has been made, and the company anticipates that a final agreement with the union will be reached. OPERATING INCOME Operating income, the measure of the company's financial performance before interest costs and other non-operating items, was impacted by the $565 million restructuring charge. Therefore, operating income was

[OPERATING INCOME GRAPH]

duction of new entertainment attractions, and the adoption of FAS 106 in 1992. Areas significantly affected by these factors since 1990 include media advertising, point-of-sale materials and developmental expenses associated with new advertising and marketing programs for established as well as new products, payroll and related costs, business taxes, depreciation, supplies, and general operating expenses. [PHOTO] TAXES AND PAYROLL COSTS The company is significantly impacted by federal, state and local taxes. Taxes applicable to 1993 operations (not including the many indirect taxes included in materials and services purchased) totaled $2.41 billion and highlight the burden of taxation on the company and the brewing industry in general. Taxes for 1993 decreased $149.3 million or 5.8% over 1992 taxes of $2.56 billion. This decrease follows increases of 3.5% in 1992 and 53.1% in 1991. The decrease in total taxes for 1993 is due primarily to the company's lower earnings level as a result of the restructuring charge offset partially by an increase in beer sales volume, the FAS 109 deferred tax revaluation adjustment and the 1% increase in the federal statutory income tax rate effective January 1, 1993. The increase for 1992 over 1991 results principally from the company's increase in beer sales volume and higher earnings level. The increase in total taxes for 1991 over 1990 substantially results from increased beer excise taxes related to the 100% increase in the federal excise tax on beer effective January 1, 1991. Payroll costs during 1993 totaled $2.48 billion, an increase of $46.2 million or 1.9% over 1992 payroll costs of $2.44 billion. Payroll costs increased 6.7% in 1992 and 4.4% in 1991. The increase in payroll costs reflects the 1992 adoption of FAS 106 and normal increases in salary and wage rates and benefit costs. Payroll costs for 1993 exclude severance pay and other costs associated with the company's enhanced retirement program. Salaries and wages paid during 1993 totaled $1.97 billion. Pension, life insurance and health care benefits amounted to $333.8 million and payroll taxes were $174.7 million. Employment at December 31, 1993 was 43,345 compared to 44,790 at December 31, 1992, reflecting approximately 1,200 employees who accepted the enhanced retirement program. At the time of publication of this annual report, the company's national labor contract with the Brewery Conference of the International Brotherhood of Teamsters, representing the majority of brewery workers, was scheduled to expire February 28, 1994. The company and union representatives have been negotiating the terms of a new labor contract for the past several months, substantive progress has been made, and the company anticipates that a final agreement with the union will be reached. OPERATING INCOME Operating income, the measure of the company's financial performance before interest costs and other non-operating items, was impacted by the $565 million restructuring charge. Therefore, operating income was $1.21 billion for 1993, a decline of 31.8% compared to 1992 operation income of $1.78 billion. Excluding the restructuring charge, operating income for 1993 and 1992 was $1.78 billion. Operating income for 1992 was $1.78 billion, an increase of 3.1% over 1991. Operating income was $1.72 billion in 1991, representing an increase of 7.7% over the previous year. Operating income as a percent of net sales was 10.5% in 1993 (15.4% excluding the restructuring charge) as compared to 15.6% in 1992 and 15.7% in 1991.

[OPERATING INCOME GRAPH]

35
FINANCIAL REVIEW [NET INCOME/DIVIDENDS ON COMMON STOCK GRAPH]

NET INTEREST COST/INTEREST CAPITALIZED Net interest cost, or interest expense less interest income, was $202.6 million in 1993, an increase of $10.1 million (or 5.3%) when compared to 1992 net interest cost of $192.5 million. Net interest cost in 1991 was $229.3 million. The increase in net interest cost during 1993 is due primarily to higher average debt balances outstanding during the year ended December 31, 1993, primarily as a result of financing international brewing investments. The decrease in net interest cost in 1992 and 1991 is due primarily to lower average debt balances outstanding each year and a $502.2 million, or 16.0%, reduction in total debt during the year ended December 31, 1991. Specific information regarding company financing (including the level of debt activity and the leveraged ESOP) and the company's capital expenditure program is presented in the Liquidity and Capital Resources section of this discussion. Interest capitalized declined $11.0 million in 1993 as compared to 1992. The decline in interest capitalized in 1993 is primarily related to the 1993 start-up of the company's new brewery in Cartersville, Ga., which resulted in the cessation of interest capitalization on the completed phase of this major capital investment. It is anticipated that capitalized interest in 1994 will be below 1993 levels as a result of the Cartersville brewery startup and continued low interest rates. Interest capitalized increased $1.2 million in 1992 as compared to 1991. This compares to an $8.1 million decline in 1991 compared to 1990. Interest capitalized fluctuates from year to year depending upon the level of qualified construction-in-progress and the weighted-average interest capitalization rate.

OTHER INCOME/(EXPENSE), NET
Other income/(expense), net, includes numerous items of a non-operating nature which do not have a material impact on the company's consolidated results of operations (either individually or in the aggregate). This category provided income in 1993 of $4.4 million compared to expense of $15.7 million in 1992 and expense of $18.1 million in 1991. The favorable 1993 situation results from the initial recognition of $8.1 million of dividend income from an international investment accounted for under the cost method and several non-recurring gains related to asset disposals.

[EARNINGS PER SHAREFULLY DILUTED GRAPH]

NET INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES Because of the $565 million pretax restructuring charge and the $33 million after-tax deferred tax revaluation adjustment, the company reported net income of $594.5 million in 1993, a decline of 35.2% compared to 1992. Excluding these one-time charges, the company would have reported net income of $980.6 million, a decline of 1.4% compared to 1992. Net income before cumulative effect for 1992 was $994.2 million, an increase of 5.8% compared with $939.8

FINANCIAL REVIEW

NET INTEREST COST/INTEREST CAPITALIZED Net interest cost, or interest expense less interest income, was $202.6 million in 1993, an increase of $10.1 million (or 5.3%) when compared to 1992 net interest cost of $192.5 million. Net interest cost in 1991 was $229.3 million. The increase in net interest cost during 1993 is due primarily to higher average debt balances outstanding during the year ended December 31, 1993, primarily as a result of financing international brewing investments. The decrease in net interest cost in 1992 and 1991 is due primarily to lower average debt balances outstanding each year and a $502.2 million, or 16.0%, reduction in total debt during the year ended December 31, 1991. Specific information regarding company financing (including the level of debt activity and the leveraged ESOP) and the company's capital expenditure program is presented in the Liquidity and Capital Resources section of this discussion. Interest capitalized declined $11.0 million in 1993 as compared to 1992. The decline in interest capitalized in 1993 is primarily related to the 1993 start-up of the company's new brewery in Cartersville, Ga., which resulted in the cessation of interest capitalization on the completed phase of this major capital investment. It is anticipated that capitalized interest in 1994 will be below 1993 levels as a result of the Cartersville brewery startup and continued low interest rates. Interest capitalized increased $1.2 million in 1992 as compared to 1991. This compares to an $8.1 million decline in 1991 compared to 1990. Interest capitalized fluctuates from year to year depending upon the level of qualified construction-in-progress and the weighted-average interest capitalization rate.

[NET INCOME/DIVIDENDS ON COMMON STOCK GRAPH]

OTHER INCOME/(EXPENSE), NET
Other income/(expense), net, includes numerous items of a non-operating nature which do not have a material impact on the company's consolidated results of operations (either individually or in the aggregate). This category provided income in 1993 of $4.4 million compared to expense of $15.7 million in 1992 and expense of $18.1 million in 1991. The favorable 1993 situation results from the initial recognition of $8.1 million of dividend income from an international investment accounted for under the cost method and several non-recurring gains related to asset disposals.

[EARNINGS PER SHAREFULLY DILUTED GRAPH]

NET INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES Because of the $565 million pretax restructuring charge and the $33 million after-tax deferred tax revaluation adjustment, the company reported net income of $594.5 million in 1993, a decline of 35.2% compared to 1992. Excluding these one-time charges, the company would have reported net income of $980.6 million, a decline of 1.4% compared to 1992. Net income before cumulative effect for 1992 was $994.2 million, an increase of 5.8% compared with $939.8 million for 1991. Net income for 1991 was 11.6% higher than 1990. The effective tax rate for 1993 of 43.4% is not comparable to 1992, due to the impact of the restructuring charge and the FAS 109 deferred tax revaluation adjustment. Excluding these non-recurring items, the effective tax rate for 1993 was 39.3%, reflecting the

for 1993 was 39.3%, reflecting the retroactive impact of the 1% federal tax rate increase signed into law during 1993. The effective income tax rate was 38.4% in 1992 and 38.2% in 1991. EARNINGS PER SHARE BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES As with net income, 1993 earnings per share were impacted by the special non-recurring adjustments. Including these adjustments, fully diluted earnings per share for 1993 were $2.17, a decrease of 32.2% compared to 1992. Excluding the 1993 adjustments, fully diluted earnings per share would have been $3.55, an increase of 2.6% compared to 1992. 36
Fully diluted earnings per share before cumulative effect were $3.46 for 1992, an increase of 6.5% compared with $3.25 for 1991. Fully diluted earnings per share for 1990 were $2.95. The difference between the company's year-to-year percentage change in net income and earnings per share is due to share repurchases. Fully diluted earnings per share assume the conversion (as of January 1, 1991) of the company's 8% Convertible Debentures due 1996. In calculating fully diluted earnings per share, weighted average shares outstanding are increased by the assumed conversion of the debentures and net income is increased by the after-tax interest expense on the debentures. FINANCIAL POSITION LIQUIDITY AND CAPITAL RESOURCES The company's primary sources of liquidity are cash provided from operating activities and certain financing activities. Information on the company's consolidated cash flows (operating activities, financing activities and investing activities) for the past three years is set forth in the Consolidated Statement of Cash Flows in this annual report. Working capital at December 31, 1993 was $(20.4) million as compared to $356.0 million at December 31, 1992. During 1993, the company issued the following debt: - $489.4 million increase in commercial paper; - $200 million, 7 3/8% debentures due 2023; and - $10 million medium-term notes. During 1993, the company reduced long-term debt as follows: - Redeemed $53.5 million, 8% dual currency notes; - Redeemed $100 million, 8% notes; and - Redeemed $49.1 million, 10% sinking fund debentures. During 1992, the company issued the following debt: - $150 million medium-term notes; and - $200 million, 6.9% 10-year notes. During 1992, the company reduced long-term debt as follows: - Redeemed $100 million, 8 7/8% notes; - Redeemed $86 million, 8.55% sinking fund debentures; - Redeemed $25 million, 7.95% sinking fund debentures; and - Lowered commercial paper borrowings by $24.7 million. Gains/losses on debt reduction activities (either individually or in the aggregate) were not material to the company's consolidated financial statements during 1993 or 1992. At December 31, 1993 and 1992 there were $569.1 million and $79.7 million, respectively, of

EXCLUDING THE ADJUSTMENTS FOR THE PROFITABILITY ENHANCEMENT PROGRAM AND THE FAS 109 IMPACT RELATED TO THE REVENUE RECONCILIAACT OF 1993, FULLY DILUTED EARNINGS PER SHARE WOULD HAVE BEEN $3.55 FOR THE YEAR, AN INCREASE OF 2.6% COMPARED TO 1992.

[CASH FLOW FROM OPERATIONS GRAPH]

EXCLUDING THE ADJUSTMENTS FOR THE PROFITABILITY ENHANCEMENT PROGRAM AND THE FAS 109 IMPACT RELATED TO THE REVENUE RECONCILIAACT OF 1993, FULLY DILUTED EARNINGS PER SHARE WOULD HAVE BEEN $3.55 FOR THE YEAR, AN INCREASE OF 2.6% COMPARED TO 1992.

Fully diluted earnings per share before cumulative effect were $3.46 for 1992, an increase of 6.5% compared with $3.25 for 1991. Fully diluted earnings per share for 1990 were $2.95. The difference between the company's year-to-year percentage change in net income and earnings per share is due to share repurchases. Fully diluted earnings per share assume the conversion (as of January 1, 1991) of the company's 8% Convertible Debentures due 1996. In calculating fully diluted earnings per share, weighted average shares outstanding are increased by the assumed conversion of the debentures and net income is increased by the after-tax interest expense on the debentures. FINANCIAL POSITION LIQUIDITY AND CAPITAL RESOURCES The company's primary sources of liquidity are cash provided from operating activities and certain financing activities. Information on the company's consolidated cash flows (operating activities, financing activities and investing activities) for the past three years is set forth in the Consolidated Statement of Cash Flows in this annual report. Working capital at December 31, 1993 was $(20.4) million as compared to $356.0 million at December 31, 1992. During 1993, the company issued the following debt: - $489.4 million increase in commercial paper; - $200 million, 7 3/8% debentures due 2023; and - $10 million medium-term notes. During 1993, the company reduced long-term debt as follows: - Redeemed $53.5 million, 8% dual currency notes; - Redeemed $100 million, 8% notes; and - Redeemed $49.1 million, 10% sinking fund debentures. During 1992, the company issued the following debt: - $150 million medium-term notes; and - $200 million, 6.9% 10-year notes. During 1992, the company reduced long-term debt as follows: - Redeemed $100 million, 8 7/8% notes; - Redeemed $86 million, 8.55% sinking fund debentures; - Redeemed $25 million, 7.95% sinking fund debentures; and - Lowered commercial paper borrowings by $24.7 million. Gains/losses on debt reduction activities (either individually or in the aggregate) were not material to the company's consolidated financial statements during 1993 or 1992. At December 31, 1993 and 1992 there were $569.1 million and $79.7 million, respectively, of commercial paper borrowings outstanding classified as long-term debt. The commercial paper is intended to be maintained on a long-term basis, with ongoing credit provided by the company's revolving credit agreements (discussed below). The company had fully hedged its foreign currency exposure for debt service payments on foreign currency denominated debt through agreements with various lending institutions. The company believes its strong beer wholesaler network is a major factor in its long-term growth. Therefore, the company believes that affording beer wholesalers the opportunity to invest in the company will further this goal. In 1989, the company registered with the Securities and Exchange Commission (SEC) a total of $300 million of seven-

[CASH FLOW FROM OPERATIONS GRAPH]

year convertible debentures (ultimately convertible into common stock) as part of its Wholesaler Investment Program. A total of $241.7 million of the debentures were issued. The debentures are subject to mandatory redemption at the end of seven years, optional redemption/repurchase at the company's or holder's discretion after three years, and special redemption/repurchase based on the occurrence of certain redemption events with respect to particular holders.

37

FINANCIAL REVIEW
The company utilizes SEC shelf registration statements to provide financing flexibility. At December 31, 1992 a total of $550 million was available for debt issuance under shelf registration statements. In 1993, the company issued $210 million in debt as previously described. As of December 31, 1993, the company had a total of $340 million remaining available for issuance under shelf registration statements. During the next five years, the company plans to continue capital expenditure programs DURING THE NEXT FIVE designed to take advantage of growth and YEARS, THE COMPANY productivity improvement opportunities for its beer PLANS TO CONTINUE and beer-related, food products and entertainment CAPITAL EXPENDITURE segments. Cash flow from operating activities will PROGRAMS DESIGNED TO provide the principal support for these capital TAKE ADVANTAGE OF investments. GROWTH AND However, a capital expenditure program of this PRODUCTIVITY IMPROVEmagnitude (as well as possible business acquisitions) MENT OPPORTUNITIES may require external financing from time to time. FOR ITS BEER AND The nature and timing of external financing will BEER-RELATED, FOOD vary depending upon the company's evaluation of PRODUCTS AND existing market conditions and other economic ENTERTAINMENT factors. SEGMENTS. In addition to its long-term debt financing, the company has access to the short-term capital market utilizing its bank credit agreements and commercial paper. The company has formal bank credit agreements which are discussed in Note 6 to the Consolidated Financial Statements. These agreements provide the company with immediate and continuing sources of liquidity. The company's ratio of total debt to total capitalization was 41.6% including the 1993 nonrecurring special charges, 36.4% and 37.3% at December 31, 1993, 1992 and 1991, respectively. The company's fixed charge coverage ratio was 7.6x for the year ended December 31, 1993 (5.2x including the 1993 nonrecurring special charges) and 7.8x and 6.4x for the years ended December 31, 1992 and 1991, respectively. As more fully described in Note 9 to the Consolidated Financial Statements, the company [CAPITAL added an employee stock ownership plan (ESOP) EXPENDITURES/ feature to its existing Deferred Income Stock DEPRECIATION AND Purchase and Savings Plans in 1989. Approximately AMORTIZATION 60% of total salaried and hourly employees GRAPH] are eligible for participation in the ESOP. In 1989, the ESOP borrowed $500 million, guaranteed by the company, and used the proceeds to buy approximately 11.3 million shares of common stock from the company. The ESOP shares are being allocated to participants over 15 years as contributions are made to the plan. Through the various company stock ownership plans, employees of Anheuser-Busch control approximately 10% of the company's outstanding common stock. In accordance with generally accepted accounting

FINANCIAL REVIEW
The company utilizes SEC shelf registration statements to provide financing flexibility. At December 31, 1992 a total of $550 million was available for debt issuance under shelf registration statements. In 1993, the company issued $210 million in debt as previously described. As of December 31, 1993, the company had a total of $340 million remaining available for issuance under shelf registration statements. During the next five years, the company plans to continue capital expenditure programs DURING THE NEXT FIVE designed to take advantage of growth and YEARS, THE COMPANY productivity improvement opportunities for its beer PLANS TO CONTINUE and beer-related, food products and entertainment CAPITAL EXPENDITURE segments. Cash flow from operating activities will PROGRAMS DESIGNED TO provide the principal support for these capital TAKE ADVANTAGE OF investments. GROWTH AND However, a capital expenditure program of this PRODUCTIVITY IMPROVEmagnitude (as well as possible business acquisitions) MENT OPPORTUNITIES may require external financing from time to time. FOR ITS BEER AND The nature and timing of external financing will BEER-RELATED, FOOD vary depending upon the company's evaluation of PRODUCTS AND existing market conditions and other economic ENTERTAINMENT factors. SEGMENTS. In addition to its long-term debt financing, the company has access to the short-term capital market utilizing its bank credit agreements and commercial paper. The company has formal bank credit agreements which are discussed in Note 6 to the Consolidated Financial Statements. These agreements provide the company with immediate and continuing sources of liquidity. The company's ratio of total debt to total capitalization was 41.6% including the 1993 nonrecurring special charges, 36.4% and 37.3% at December 31, 1993, 1992 and 1991, respectively. The company's fixed charge coverage ratio was 7.6x for the year ended December 31, 1993 (5.2x including the 1993 nonrecurring special charges) and 7.8x and 6.4x for the years ended December 31, 1992 and 1991, respectively. As more fully described in Note 9 to the Consolidated Financial Statements, the company [CAPITAL added an employee stock ownership plan (ESOP) EXPENDITURES/ feature to its existing Deferred Income Stock DEPRECIATION AND Purchase and Savings Plans in 1989. Approximately AMORTIZATION 60% of total salaried and hourly employees GRAPH] are eligible for participation in the ESOP. In 1989, the ESOP borrowed $500 million, guaranteed by the company, and used the proceeds to buy approximately 11.3 million shares of common stock from the company. The ESOP shares are being allocated to participants over 15 years as contributions are made to the plan. Through the various company stock ownership plans, employees of Anheuser-Busch control approximately 10% of the company's outstanding common stock. In accordance with generally accepted accounting principles, the unpaid principal portion of the ESOP debt is reflected on the company's balance sheet as long-term debt with an equal, offsetting reduction to Shareholders Equity. In addition, total ESOP expense is allocated to interest expense and operating expense based upon the ratio of interest and principal payments on the debt. CAPITAL EXPENDITURES The company has a formalized and intensive review procedure for all capital expenditures. The most important measure of acceptability of a capital

project is its projected discounted cash flow return on investment. Capital expenditures in 1993 amounted to $776.9 million as compared with $737.2 million in 1992. During the past five years, capital expenditures totaled $4.2 billion. Capital expenditures for 1993 for the company's beer and beer-related operations were $529.7 million. Major expenditures by the company's brewing subsidiary included continuing construction of the company's new brewery in Cartersville, Ga., and numerous modernization projects designed to improve productivity at all breweries. The remaining 1993 capital expenditures totaling $247.2 million were made by the company's food products and entertainment operations. Major expenditures included numerous Campbell Taggart and Eagle Snacks modernization and productivity improvement projects, as well as new Busch Entertainment attractions. 38

The company expects its capital expenditures in 1994 to approximate $800 million. Capital expenditures during the five-year period 1994-1998 are expected to approximate $4 billion. ENVIRONMENTAL MATTERS
[PHOTO] The company is subject to federal, state and local environmental protection laws and regulations and is operating within such laws or is taking action aimed at assuring compliance with such laws and regulations. Compliance with these laws and regulations is not expected to materially affect the company's competitive position. The company has not been identified as a Potentially Responsible Party (PRP) at an Environmental Protection Agency designated clean-up site which could have a material impact on the company's consolidated financial statements. In recognition of the importance of environmental laws and regulations, the company has established an Environmental Policy Committee. This committee, which reports directly to the Audit Committee of the Board of Directors, is comprised of senior company executives. The mission of the committee is to (a) monitor and interpret environmental policies to insure high standards of corporate responsibility; (b) establish a framework to assure strict compliance in the operations of all of the company's businesses with all environmental regulations; (c) provide adequate resources-human, financial and physical-required to assure compliance with all environmental laws and policies; and (d) exercise oversight responsibilities of company environmental programs. OTHER MATTERS In June 1993, the company purchased a 17.7% equity interest in Grupo Modelo, Mexico's largest brewer, and its subsidiaries for $477 million. The company is accounting for its investment in Modelo under the cost method. The investment is included in the balance sheet within the caption "Investments in and advances to affiliated companies." In connection with the purchase, three Anheuser-Busch representatives have been elected to the Modelo board and a Modelo representative has been elected to serve on the Anheuser-Busch board. The agreement gives Anheuser-Busch options to increase its investment to a minority position in Modelo of approximately 35% and to acquire an additional minority interest in Modelo's subsidiaries. These options may be exercised between mid-1995 and the end of 1997. Under certain circumstances involving the non-exercise of such options by Anheuser-Busch, at either party's election, Modelo may repurchase approximately half of Anheuser-Busch's investment at cost and repurchase the remainder at prevailing market rates.

The company expects its capital expenditures in 1994 to approximate $800 million. Capital expenditures during the five-year period 1994-1998 are expected to approximate $4 billion. ENVIRONMENTAL MATTERS
[PHOTO] The company is subject to federal, state and local environmental protection laws and regulations and is operating within such laws or is taking action aimed at assuring compliance with such laws and regulations. Compliance with these laws and regulations is not expected to materially affect the company's competitive position. The company has not been identified as a Potentially Responsible Party (PRP) at an Environmental Protection Agency designated clean-up site which could have a material impact on the company's consolidated financial statements. In recognition of the importance of environmental laws and regulations, the company has established an Environmental Policy Committee. This committee, which reports directly to the Audit Committee of the Board of Directors, is comprised of senior company executives. The mission of the committee is to (a) monitor and interpret environmental policies to insure high standards of corporate responsibility; (b) establish a framework to assure strict compliance in the operations of all of the company's businesses with all environmental regulations; (c) provide adequate resources-human, financial and physical-required to assure compliance with all environmental laws and policies; and (d) exercise oversight responsibilities of company environmental programs. OTHER MATTERS In June 1993, the company purchased a 17.7% equity interest in Grupo Modelo, Mexico's largest brewer, and its subsidiaries for $477 million. The company is accounting for its investment in Modelo under the cost method. The investment is included in the balance sheet within the caption "Investments in and advances to affiliated companies." In connection with the purchase, three Anheuser-Busch representatives have been elected to the Modelo board and a Modelo representative has been elected to serve on the Anheuser-Busch board. The agreement gives Anheuser-Busch options to increase its investment to a minority position in Modelo of approximately 35% and to acquire an additional minority interest in Modelo's subsidiaries. These options may be exercised between mid-1995 and the end of 1997. Under certain circumstances involving the non-exercise of such options by Anheuser-Busch, at either party's election, Modelo may repurchase approximately half of Anheuser-Busch's investment at cost and repurchase the remainder at prevailing market rates. In July 1993, the company purchased a 5% interest in China's largest brewer, Tsingtao Brewery Co., Ltd., for $16.4 million. The purchase occurred in conjunction with Tsingtao's initial public offering of shares on the Stock Exchange of Hong Kong. This public offering represented approximately 35% of the company, including the 5% purchased by Anheuser-Busch. The initial 5% purchase by Anheuser-Busch (which will be accounted for under the cost method and is included in the balance sheet within the caption "Investments in and advances to affiliated companies") is a strategic investment which may lead to additional commercial or investment relationships between the two companies. In December 1993, the company acquired the remaining 50% of International Label Company for $19.2 million. The acquisition was accounted for using the purchase

method of accounting, and the excess cost of the acquisition over the assets acquired is being amortized on a straight-line basis over 40 years. DIVIDENDS Cash dividends paid to common shareholders were $370.0 million in 1993 and $338.3 million in 1992. Dividends on common stock are paid in the months of March, June,

39

FINANCIAL REVIEW
September and December of each year. In the second quarter of 1993, effective with the

FINANCIAL REVIEW
September and December of each year. In the second quarter of 1993, effective with the September dividend, the Board of Directors increased the quarterly dividend rate by 12.5% from $.32 to $.36 per share. Annual dividends per common share increased 13.3% in 1993 to $1.36 per share compared to $1.20 per share in 1992. In 1993, dividends were $.32 for each of the first two quarters and $.36 for the last two quarters, as compared to $.28 for the first two quarters and $.32 for the last two quarters of 1992. The company has paid dividends in each of the past 61 years. During that time, the company's

THE COMPANY HAS PAID DIVIDENDS IN

stock has split on seven different occasions and EACH OF THE PAST 61 stock dividends were paid three times. YEARS. DURING THAT TIME, THE COMPANY'S
At December 31, 1993, common shareholders of record numbered 67,612 compared with 67,273 at the end of 1992. STOCK HAS SPLIT ON SEVEN DIFFERENT OCCASIONS AND STOCK DIVIDENDS WERE PAID THREE TIMES.

PRICE RANGE OF COMMON STOCK The company's common stock is listed on the New York Stock Exchange (NYSE) under the symbol "BUD". The table below summarizes the high and low closing prices on the NYSE.

- - - --------------------------------------------------------------PRICE RANGE OF COMMON STOCK - - - --------------------------------------------------------------1993 1992 - - - --------------------------------------------------------------QUARTER HIGH LOW HIGH LOW - - - --------------------------------------------------------------First............... 60 50-3/4 60-1/2 54-7/8 Second.............. 53-3/4 47-3/8 56-7/8 52-1/8 Third............... 48-1/4 44-1/8 57-3/4 53 Fourth.............. 50-5/8 45-1/2 60 53-5/8 - - - ------------------------------------------------------------------

The closing price of the company's common stock at December 31, 1993 and 1992 was $49.125 and $58.50, respectively. COMMON STOCK AND OTHER SHAREHOLDERS EQUITY [SHAREHOLDERS Shareholders equity was $4.26 billion at EQUITY/LONGDecember 31, 1993, as compared with $4.62 billion TERM DEBT GRAPH] at December 31, 1992. The decrease in shareholders equity during the year is primarily related to 1993 special charges, the share repurchase program and dividends. The book value of each common share of stock at December 31, 1993 was $15.94, as compared to $16.60 at December 31, 1992. In 1993, the return on shareholders equity was 13.4% as compared to 22.0% in 1992. Excluding the nonrecurring special charges, return on shareholders equity for 1993 would have been 21.2%. The Board of Directors has approved various resolutions in recent years authorizing the company to repurchase shares of its common stock for investment purposes and to meet the requirements of the company's

various stock purchase and savings plans. In June 1992

the board authorized the repurchase of 20 million shares. The company has acquired 12.6 million, 9.6 million and 23,500 shares of common stock in 1993, 1992 and 1991 for $639.8 million, $518.7 million and $1.1 million, respectively. At December 31, 1993, approximately five million shares were available for repurchase under the June 1992 authorization. INFLATION General inflation has not had a significant impact on the company over the past three years and is not expected to have a significant impact in the foreseeable future. 40

RESPONSIBILITY FOR FINANCIAL STATEMENTS The management of Anheuser-Busch Companies, Inc. is responsible for the financial statements and other information included in this annual report. Management has selected those generally accepted accounting principles it considers appropriate to prepare the financial statements and other data contained herein. The company maintains accounting and reporting systems, supported by an internal control system, which management believes are adequate to provide reasonable assurances that assets are safeguarded against loss from unauthorized use or disposition and financial records are reliable for preparing financial statements. During 1993, the company's internal auditors, in conjunction with Price Waterhouse, its independent accountants, performed a comprehensive review of the adequacy of the company's internal accounting control system. Based on the comprehensive review, it is management's opinion that the company has an effective system of internal accounting control. The Audit Committee of the Board of Directors, which consists of six non- management directors, oversees the company's financial reporting and internal control systems, recommends selection of the company's public accountants and meets with the public accountants and internal auditors to review the overall scope and specific plans for their respective audits. The committee held four meetings during 1993. A more complete description of the functions performed by the Audit Committee can be found in the company's proxy statement. The report of Price Waterhouse on its examinations of the consolidated financial statements of the company appears below. REPORT OF INDEPENDENT ACCOUNTANTS PRICE WATERHOUSE
February 7, 1994 To the Shareholders and Board of Directors of Anheuser-Busch Companies, Inc. One Boatmen's Plaza St. Louis, MO 63101

We have audited the accompanying Consolidated Balance Sheet of Anheuser- Busch Companies, Inc. and its subsidiaries as of December 31, 1993 and 1992, and the related Consolidated Statements of Income, Changes in Shareholders Equity and Cash Flows for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements audited by us present fairly, in all material respects, the financial position of Anheuser-Busch Companies, Inc. and its subsidiaries at December 31, 1993 and 1992, and the results of their operations and their cash flows for each of the three years in the period ended December 31,

RESPONSIBILITY FOR FINANCIAL STATEMENTS The management of Anheuser-Busch Companies, Inc. is responsible for the financial statements and other information included in this annual report. Management has selected those generally accepted accounting principles it considers appropriate to prepare the financial statements and other data contained herein. The company maintains accounting and reporting systems, supported by an internal control system, which management believes are adequate to provide reasonable assurances that assets are safeguarded against loss from unauthorized use or disposition and financial records are reliable for preparing financial statements. During 1993, the company's internal auditors, in conjunction with Price Waterhouse, its independent accountants, performed a comprehensive review of the adequacy of the company's internal accounting control system. Based on the comprehensive review, it is management's opinion that the company has an effective system of internal accounting control. The Audit Committee of the Board of Directors, which consists of six non- management directors, oversees the company's financial reporting and internal control systems, recommends selection of the company's public accountants and meets with the public accountants and internal auditors to review the overall scope and specific plans for their respective audits. The committee held four meetings during 1993. A more complete description of the functions performed by the Audit Committee can be found in the company's proxy statement. The report of Price Waterhouse on its examinations of the consolidated financial statements of the company appears below. REPORT OF INDEPENDENT ACCOUNTANTS PRICE WATERHOUSE
February 7, 1994 To the Shareholders and Board of Directors of Anheuser-Busch Companies, Inc. One Boatmen's Plaza St. Louis, MO 63101

We have audited the accompanying Consolidated Balance Sheet of Anheuser- Busch Companies, Inc. and its subsidiaries as of December 31, 1993 and 1992, and the related Consolidated Statements of Income, Changes in Shareholders Equity and Cash Flows for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements audited by us present fairly, in all material respects, the financial position of Anheuser-Busch Companies, Inc. and its subsidiaries at December 31, 1993 and 1992, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1993, in conformity with generally accepted accounting principles. As discussed in Note 3 to the financial statements, the company changed its method of accounting for postretirement benefits other than pensions and income taxes in 1992. PRICE WATERHOUSE 41
CONSOLIDATED BALANCE SHEET Anheuser-Busch Companies, Inc., and Subsidiaries ASSETS (In millions) - - - ----------------------------------------------------------------------------------------DECEMBER 31, 1993 1992 - - - ----------------------------------------------------------------------------------------CURRENT ASSETS:

CONSOLIDATED BALANCE SHEET Anheuser-Busch Companies, Inc., and Subsidiaries ASSETS (In millions) - - - ----------------------------------------------------------------------------------------DECEMBER 31, 1993 1992 - - - ----------------------------------------------------------------------------------------CURRENT ASSETS: Cash and marketable securities ............................... $ 127.4 $ 215.0 Accounts and notes receivable, less allowance for doubtful accounts of $6.7 in 1993 and $4.9 in 1992................... 751.1 649.8 Inventories Raw materials and supplies.................................. 385.5 417.7 Work in process............................................. 99.4 88.7 Finished goods.............................................. 141.8 154.3 Total inventories......................................... 626.7 660.7 Other current assets.......................................... 290.0 290.3 --------------Total current assets........................................ 1,795.2 1,815.8 - - - ----------------------------------------------------------------------------------------INVESTMENTS AND OTHER ASSETS: Investments in and advances to affiliated companies........... 629.5 171.6 Investment properties......................................... 151.9 164.8 Deferred charges and other non-current assets................. 310.7 356.3 Excess of cost over net assets of acquired businesses, net.... 495.9 505.7 -------------1,588.0 1,198.4 - - - ----------------------------------------------------------------------------------------PLANT AND EQUIPMENT: Land.......................................................... 281.9 273.3 Buildings..................................................... 3,445.5 3,295.2 Machinery and equipment....................................... 7,656.5 7,086.9 Construction in progress...................................... 343.2 729.7 ---------------11,727.1 11,385.1 Accumulated depreciation...................................... (4,230.0) (3,861.4) ---------------7,497.1 7,523.7 ---------------$10,880.3 $10,537.9 ----------------- - - ----------------------------------------------------------------------------------------The accompanying statements should be read in conjunction with the Notes to Consolidated Financial Statements appearing on pages 47-59 of this report.

42
LIABILITIES AND SHAREHOLDERS EQUITY (In millions) - - - ---------------------------------------------------------------------------------------DECEMBER 31, 1993 1992 - - - ---------------------------------------------------------------------------------------CURRENT LIABILITIES: Accounts payable............................................ $ 812.5 $ 737.4 Accrued salaries, wages and benefits........................ 243.9 257.3 Accrued interest payable.................................... 54.9 52.4 Due to customers for returnable containers.................. 50.3 48.2 Accrued taxes, other than income taxes...................... 121.7 117.0 Estimated income taxes...................................... 91.0 38.8 Restructuring accrual....................................... 189.2 Other current liabilities................................... 252.1 208.7 --------------Total current liabilities................................. 1,815.6 1,459.8 - - - ---------------------------------------------------------------------------------------POSTRETIREMENT BENEFITS....................................... 607.1 538.3 - - - ---------------------------------------------------------------------------------------LONG-TERM DEBT................................................ 3,031.7 2,642.5 - - - ---------------------------------------------------------------------------------------DEFERRED INCOME TAXES......................................... 1,170.4 1,276.9 - - - ---------------------------------------------------------------------------------------COMMON STOCK AND OTHER SHAREHOLDERS EQUITY: Common stock, $1.00 par value, authorized 800,000,000 shares........................................ 342.5 341.3 Capital in excess of par value.............................. 808.7 762.9

LIABILITIES AND SHAREHOLDERS EQUITY (In millions) - - - ---------------------------------------------------------------------------------------DECEMBER 31, 1993 1992 - - - ---------------------------------------------------------------------------------------CURRENT LIABILITIES: Accounts payable............................................ $ 812.5 $ 737.4 Accrued salaries, wages and benefits........................ 243.9 257.3 Accrued interest payable.................................... 54.9 52.4 Due to customers for returnable containers.................. 50.3 48.2 Accrued taxes, other than income taxes...................... 121.7 117.0 Estimated income taxes...................................... 91.0 38.8 Restructuring accrual....................................... 189.2 Other current liabilities................................... 252.1 208.7 --------------Total current liabilities................................. 1,815.6 1,459.8 - - - ---------------------------------------------------------------------------------------POSTRETIREMENT BENEFITS....................................... 607.1 538.3 - - - ---------------------------------------------------------------------------------------LONG-TERM DEBT................................................ 3,031.7 2,642.5 - - - ---------------------------------------------------------------------------------------DEFERRED INCOME TAXES......................................... 1,170.4 1,276.9 - - - ---------------------------------------------------------------------------------------COMMON STOCK AND OTHER SHAREHOLDERS EQUITY: Common stock, $1.00 par value, authorized 800,000,000 shares........................................ 342.5 341.3 Capital in excess of par value.............................. 808.7 762.9 Retained earnings........................................... 6,023.4 5,794.9 Foreign currency translation adjustment..................... (33.0) (1.4) --------------7,141.6 6,897.7 Treasury stock, at cost..................................... (2,479.6) (1,842.9) ESOP debt guarantee offset.................................. (406.5) (434.4) --------------4,255.5 4,620.4 - - - ---------------------------------------------------------------------------------------COMMITMENTS AND CONTINGENCIES................................. $10,880.3 $10,537.9 ========= ========= - - - ----------------------------------------------------------------------------------------

43
CONSOLIDATED STATEMENT OF INCOME Anheuser-Busch Companies, Inc., and Subsidiaries (In millions, except per share data) - - - --------------------------------------------------------------------------------------------------YEAR ENDED DECEMBER 31, 1993 1992 1991 - - - --------------------------------------------------------------------------------------------------Sales................................................... $13,185.1 $13,062.3 $12,634.2 Less federal and state excise taxes................... 1,679.8 1,668.6 1,637.9 ------------------------Net sales............................................... 11,505.3 11,393.7 10,996.3 Cost of products and services......................... 7,419.7 7,309.1 7,148.7 -----------------------Gross profit............................................ 4,085.6 4,084.6 3,847.6 Marketing, distribution and administrative expenses... 2,308.7 2,308.9 2,126.1 Restructuring charge.................................. 565.0 ------------------------Operating income........................................ 1,211.9 1,775.7 1,721.5 Other income and expenses: Interest expense...................................... (207.8) (199.6) (238.5) Interest capitalized.................................. 36.7 47.7 46.5 Interest income....................................... 5.2 7.1 9.2 Other income/(expense), net........................... 4.4 (15.7) (18.1) ------------------------Income before income taxes.............................. 1,050.4 1,615.2 1,520.6 ------------------------Provision for income taxes: Current............................................... 562.4 561.9 479.1 Deferred.............................................. (139.5) 59.1 101.7 Revaluation of deferred tax liability (FAS 109)....... 33.0 -------------------------

CONSOLIDATED STATEMENT OF INCOME Anheuser-Busch Companies, Inc., and Subsidiaries (In millions, except per share data) - - - --------------------------------------------------------------------------------------------------YEAR ENDED DECEMBER 31, 1993 1992 1991 - - - --------------------------------------------------------------------------------------------------Sales................................................... $13,185.1 $13,062.3 $12,634.2 Less federal and state excise taxes................... 1,679.8 1,668.6 1,637.9 ------------------------Net sales............................................... 11,505.3 11,393.7 10,996.3 Cost of products and services......................... 7,419.7 7,309.1 7,148.7 -----------------------Gross profit............................................ 4,085.6 4,084.6 3,847.6 Marketing, distribution and administrative expenses... 2,308.7 2,308.9 2,126.1 Restructuring charge.................................. 565.0 ------------------------Operating income........................................ 1,211.9 1,775.7 1,721.5 Other income and expenses: Interest expense...................................... (207.8) (199.6) (238.5) Interest capitalized.................................. 36.7 47.7 46.5 Interest income....................................... 5.2 7.1 9.2 Other income/(expense), net........................... 4.4 (15.7) (18.1) ------------------------Income before income taxes.............................. 1,050.4 1,615.2 1,520.6 ------------------------Provision for income taxes: Current............................................... 562.4 561.9 479.1 Deferred.............................................. (139.5) 59.1 101.7 Revaluation of deferred tax liability (FAS 109)....... 33.0 ------------------------455.9 621.0 580.8 ------------------------Net income, before cumulative effect of accounting changes.................................... 594.5 994.2 939.8 Cumulative effect of changes in the method of accounting for postretirement benefits (FAS 106) and income taxes (FAS 109), net of tax benefit of $186.4 million..................................... (76.7) ------------------------NET INCOME.............................................. $ 594.5 $ 917.5 $ 939.8 ========= ========= ========= - - - --------------------------------------------------------------------------------------------------PRIMARY EARNINGS PER SHARE: Net income, before cumulative effect.................. $ 2.17 $ 3.48 $ 3.26 Cumulative effect of accounting changes............... (.26) ------------------------Net income............................................ $ 2.17 $ 3.22 $ 3.26 ========= ========= ========= FULLY DILUTED EARNINGS PER SHARE: Net income, before cumulative effect.................. $ 2.17 $ 3.46 $ 3.25 Cumulative effect of accounting changes............... (.26) ------------------------Net income............................................ $ 2.17 $ 3.20 $ 3.25 ========= ========= ========= - - - --------------------------------------------------------------------------------------------------The accompanying statements should be read in conjunction with the Notes to Consolidated Financial Statem pages 47-59 of this report.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY Anheuser-Busch Companies, Inc., and Subsidiaries SHAREHOLDERS EQUITY (In millions, except per share data) - - - --------------------------------------------------------------------------------------------------ESOP CAPITAL IN DEBT COMMON EXCESS OF RETAINED TREASURY GUARANTE STOCK PAR VALUE EARNINGS STOCK OFFSET - - - --------------------------------------------------------------------------------------------------BALANCE AT DECEMBER 31, 1990............ $335.7 $558.9 $4,563.3 $(1,323.1) $(485. Net income.............................. 939.8 Common dividends ($1.06 per share)..................... (301.1) Shares issued under stock plans........................... 2.7 92.2 7.8 Conversion of Convertible

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY Anheuser-Busch Companies, Inc., and Subsidiaries SHAREHOLDERS EQUITY (In millions, except per share data) - - - --------------------------------------------------------------------------------------------------ESOP CAPITAL IN DEBT COMMON EXCESS OF RETAINED TREASURY GUARANTE STOCK PAR VALUE EARNINGS STOCK OFFSET - - - --------------------------------------------------------------------------------------------------BALANCE AT DECEMBER 31, 1990............ $335.7 $558.9 $4,563.3 $(1,323.1) $(485. Net income.............................. 939.8 Common dividends ($1.06 per share)..................... (301.1) Shares issued under stock plans........................... 2.7 92.2 7.8 Conversion of Convertible Debentures............................ .1 3.4 Reduction of ESOP debt guarantee............................. 23. Treasury stock acquired................. (1.1) Foreign currency translation adjustment............................ - - - --------------------------------------------------------------------------------------------------BALANCE AT DECEMBER 31, 1991............ 338.5 654.5 5,209.8 (1,324.2) (461. Net income.............................. 917.5 Common dividends ($1.20 per share)..................... (338.3) Shares issued under stock plans........................... 2.8 107.6 5.9 Conversion of Convertible Debentures............................ .8 Reduction of ESOP debt guarantee............................. 26. Treasury stock acquired................. (518.7) Foreign currency translation adjustment............................ - - - --------------------------------------------------------------------------------------------------BALANCE AT DECEMBER 31, 1992............ 341.3 762.9 5,794.9 (1,842.9) (434. Net income.............................. 594.5 Common dividends ($1.36 per share)..................... (370.0) Shares issued under stock plans........................... 1.2 44.2 4.0 Reduction of ESOP debt guarantee............................. 27. Treasury stock acquired net of treasury shares issued............. 1.6 (636.7) Foreign currency translation adjustment............................ - - - --------------------------------------------------------------------------------------------------BALANCE AT DECEMBER 31, 1993............ $342.5 $808.7 $6,023.4 $(2,479.6) $(406. - - - --------------------------------------------------------------------------------------------------The accompanying statements should be read in conjunction with the Notes to Consolidated Financial Statem pages 47-59 of this report.

45
CONSOLIDATED STATEMENT OF CASH FLOWS Anheuser-Busch Companies, Inc., and Subsidiaries (In millions) - - - --------------------------------------------------------------------------------------------------YEAR ENDED DECEMBER 31, 1993 1992 1991 - - - --------------------------------------------------------------------------------------------------CASH FLOW FROM OPERATING ACTIVITIES: Net income............................................ $ 594.5 $ 917.5 $ 939.8 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization..................... 608.3 567.0 534.1 (Decrease)/increase in deferred income taxes.................................... (106.5) 62.0 104.5 Restructuring charge ($565 million less cash payments of $65.1 million)............ 499.9 Cumulative effect of accounting changes.............................. 76.7 Decrease/(increase) in non-cash

CONSOLIDATED STATEMENT OF CASH FLOWS Anheuser-Busch Companies, Inc., and Subsidiaries (In millions) - - - --------------------------------------------------------------------------------------------------YEAR ENDED DECEMBER 31, 1993 1992 1991 - - - --------------------------------------------------------------------------------------------------CASH FLOW FROM OPERATING ACTIVITIES: Net income............................................ $ 594.5 $ 917.5 $ 939.8 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization..................... 608.3 567.0 534.1 (Decrease)/increase in deferred income taxes.................................... (106.5) 62.0 104.5 Restructuring charge ($565 million less cash payments of $65.1 million)............ 499.9 Cumulative effect of accounting changes.............................. 76.7 Decrease/(increase) in non-cash working capital................................. 99.6 (13.4) (208.5) Other, net........................................ 56.7 18.9 24.8 ----------------------Cash provided by operating activities................... 1,752.5 1,628.7 1,394.7 - - - --------------------------------------------------------------------------------------------------CASH FLOW FROM INVESTING ACTIVITIES: Capital expenditures.................................. (776.9) (737.2) (702.5) Business acquisitions................................. (524.3) (41.4) (15.7) ----------------------Cash (used for) investing activities.................... (1,301.2) (778.6) (718.2) - - - --------------------------------------------------------------------------------------------------CASH FLOW FROM FINANCING ACTIVITIES: Increase in long-term debt............................ 689.2 351.3 .6 Decrease in long-term debt............................ (267.7) (343.8) (479.1) Dividends paid to shareholders........................ (370.0) (338.3) (301.1) Acquisition of treasury stock......................... (639.8) (518.7) (1.1) Shares issued under stock plans and conversion of Convertible Debentures................ 49.4 117.1 106.2 ----------------------Cash (used for) financing activities.................. (538.9) (732.4) (674.5) - - - --------------------------------------------------------------------------------------------------Net increase/(decrease) in cash and marketable securities during the year................. (87.6) 117.7 2.0 Cash and marketable securities at beginning of year..................................... 215.0 97.3 95.3 ----------------------Cash and marketable securities at end of year........................................... $ 127.4 $ 215.0 $ 97.3 ----------------------- - - --------------------------------------------------------------------------------------------------The accompanying statements should be read in conjunction with the Notes to Consolidated Financial Statem pages 47-59 of this report.

46

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- - - --------------------------------------------------------------------------1. SUMMARY OF This summary of significant accounting principles and SIGNIFICANT policies of Anheuser-Busch Companies, Inc. and its ACCOUNTING subsidiaries is presented to assist the reader in PRINCIPLES evaluating the company's financial statements included AND POLICIES in this report. These principles and conform to generally accepted accounting principles. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the company and all its subsidiaries. All significant intercompany transactions have been eliminated. FOREIGN CURRENCY TRANSLATION Adjustments resulting from foreign currency transactions are recognized in income, whereas adjustments resulting from the translation of financial statements are reflected as a separate component of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- - - --------------------------------------------------------------------------1. SUMMARY OF This summary of significant accounting principles and SIGNIFICANT policies of Anheuser-Busch Companies, Inc. and its ACCOUNTING subsidiaries is presented to assist the reader in PRINCIPLES evaluating the company's financial statements included AND POLICIES in this report. These principles and conform to generally accepted accounting principles. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the company and all its subsidiaries. All significant intercompany transactions have been eliminated. FOREIGN CURRENCY TRANSLATION Adjustments resulting from foreign currency transactions are recognized in income, whereas adjustments resulting from the translation of financial statements are reflected as a separate component of shareholders equity. EXCESS OF COST OVER NET ASSETS OF ACQUIRED BUSINESSES The excess of the cost over the net assets of acquired businesses is amortized on a straight-line basis over a period of 40 years. Accumulated amortization at December 31, 1993 and 1992 was $74.2 million and $63.0 million, respectively. INVENTORIES AND PRODUCTION COSTS Inventories are valued at the lower of cost or market. Cost is determined under the last-in, first-out method (LIFO) for substantially all brewing inventories and under the first-in, first-out method (FIFO) for substantially all food product inventories. PLANT AND EQUIPMENT Plant and equipment is carried at cost and includes expenditures for new facilities and those which substantially increase the useful lives of existing facilities. Maintenance, repairs and minor renewals are expensed as incurred. When properties are retired or otherwise disposed, the related cost and accumulated depreciation are eliminated from the respective accounts and any gain or loss on disposition is reflected in income or expense. Depreciation is provided principally on the straightline method over the estimated useful lives of the assets, resulting in depreciation rates on buildings ranging from 2% to 10% and on machinery and equipment ranging from 4% to 25%.

CAPITALIZATION OF INTEREST Interest relating to the cost of acquiring certain fixed assets is capitalized. The capitalized interest is included as part of the cost of the related asset and is amortized over its estimated useful life. INCOME TAXES The provision for income taxes is based on the income and expense amounts as reported in the Consolidated Statement of Income. The company has elected to utilize certain provisions of federal income tax laws and regulations to reduce current taxes payable. Effective in 1992, deferred income taxes are recognized for the effect of temporary differences between financial and tax reporting in accordance with the requirements of

Statement of Financial Accounting Standards No. 109. Prior to 1992, deferred taxes were recognized for the effect of timing differences between financial and tax reporting in accordance with the requirements of Accounting Principles Board Opinion No. 11. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND CONCENTRATION OF CREDIT RISK The company is party to certain financial instruments with off-balance-sheet risk incurred in the normal course of business. These financial instruments include financial guarantees, foreign currency forward and option contracts designated as hedges, foreign currency payment swaps and interest rate swaps. The company's exposure to credit loss in the event of non-performance by the counterparty to these financial instruments (either individually or in the aggregate) is not material. The company does not have a material concentration of accounts receivable or credit risk. 47

FINANCIAL REVIEW FAIR VALUE OF FINANCIAL INSTRUMENTS Long-term debt is the only significant financial instrument of the company with a fair value different than its recorded value. As of December 31, 1993, the fair value of long-term debt was $3.1 billion compared to its recorded value of $3.0 billion. The fair value of long-term debt was estimated based on the quoted market values for the same or similar debt issues, or rates currently available for debt with similar terms. RESEARCH AND DEVELOPMENT, ADVERTISING, PROMOTIONAL COSTS AND INITIAL PLANT COSTS Research and development, advertising, promotional costs and initial plant costs are expensed in the year in which these costs are incurred. EARNINGS PER SHARE Earnings per share of common stock are based on the weighted average number of shares of common stock outstanding during the respective years as shown below (in millions):
- - - -------------------------------------------------------------------------1993 1992 1991 - - - -------------------------------------------------------------------------Primary weighted average shares............ 274.3 285.8 287.9 Fully diluted weighted average shares...... 279.3 290.8 292.9 - - - --------------------------------------------------------------------------

Fully diluted earnings per share of common stock assume the conversion of the company's 8% convertible debentures due 1996 and the elimination of the related after-tax interest expense.
- - - --------------------------------------------------------------------------In September 1993, the company announced a 2-PROFITABILITY Profitability Enhancement Program to improve sales ENHANCEMENT and profitability. The Program, which involves PROGRAM significant organizational and operational changes, includes the following elements: - An enhanced retirement program for salaried employees - The write-down of under-performing assets and investments

FINANCIAL REVIEW FAIR VALUE OF FINANCIAL INSTRUMENTS Long-term debt is the only significant financial instrument of the company with a fair value different than its recorded value. As of December 31, 1993, the fair value of long-term debt was $3.1 billion compared to its recorded value of $3.0 billion. The fair value of long-term debt was estimated based on the quoted market values for the same or similar debt issues, or rates currently available for debt with similar terms. RESEARCH AND DEVELOPMENT, ADVERTISING, PROMOTIONAL COSTS AND INITIAL PLANT COSTS Research and development, advertising, promotional costs and initial plant costs are expensed in the year in which these costs are incurred. EARNINGS PER SHARE Earnings per share of common stock are based on the weighted average number of shares of common stock outstanding during the respective years as shown below (in millions):
- - - -------------------------------------------------------------------------1993 1992 1991 - - - -------------------------------------------------------------------------Primary weighted average shares............ 274.3 285.8 287.9 Fully diluted weighted average shares...... 279.3 290.8 292.9 - - - --------------------------------------------------------------------------

Fully diluted earnings per share of common stock assume the conversion of the company's 8% convertible debentures due 1996 and the elimination of the related after-tax interest expense.
- - - --------------------------------------------------------------------------In September 1993, the company announced a 2-PROFITABILITY Profitability Enhancement Program to improve sales ENHANCEMENT and profitability. The Program, which involves PROGRAM significant organizational and operational changes, includes the following elements: - An enhanced retirement program for salaried employees - The write-down of under-performing assets and investments - Restructuring and reorganization of the company As a result of the Program, the company recognized a $565 million restructuring charge during third quarter 1993. The Program includes a 10% reduction in the salaried workforce (approximately 1,200 employees). This reduction was achieved through an enhanced retirement program. The enhanced retirement program offered salaried employees age 53 or older certain incentives and the opportunity to retire effective December 31, 1993. Incentives included pension credits for an additional five years of service and five years of age. The total cost of the enhanced retirement program was $142 million and is discussed in more detail in Note 10. In addition, as part of the Program, the company plans to restructure and reorganize certain operations at a cost of $278 million. The restructuring and reorganization portion of the Program includes relocation of the company's Campbell Taggart, Inc. and Eagle Snacks, Inc. corporate offices to St. Louis; the closing of several smaller non-beer manufacturing operations; and the rationalization of brewing operations based on the successful practices employed at its newer breweries. Also included in the Program is $145 million for the write-down of under-performing assets and investments to their net realizable (economic) values. - - - -------------------------------------------------------------------------Effective January 1, 1992, the company adopted 3-ADOPTION Statements of Financial Accounting Standards No. 106 IMPACT OF NEW

(FAS 106), "Employers' Accounting for Postretirement

ACCOUNTING

Benefits Other Than Pensions," and No. 109 (FAS 109), PRONOUNCEMENTS "Accounting for Income Taxes." The company elected to immediately recognize the cumulative effect of adoption of FAS 106/109 pertaining to years prior to 1992 through a one-time adjustment which impacted 1992 net income as follows (in millions):

- - - --------------------------------------------------------------------------1992 Net Income Increase (Decrease) - - - --------------------------------------------------------------------------Postretirement benefits (FAS 106).................... $(319.5) Accounting for income taxes (FAS 109)................ 242.8 ------Net income impact.................................... $ (76.7) ======= Fully diluted earnings per share impact.............. $ (.26) ======== - - - ---------------------------------------------------------------------------

48
Implementation of FAS 106 in 1992 was based on benefit levels in effect at the time of adoption. Certain changes to these benefit levels were implemented in 1993, thereby reducing the pretax expense level in 1993 by $27.0 million to $48.3 million. Assuming constant statutory tax rates, FAS 109 is not expected to have a significant ongoing financial impact on the company. However, statutory tax rate changes, as occurred in August 1993, require revaluation of the deferred tax liability, with the net change recognized in the income statement in the year the tax rate change is enacted. - - - -------------------------------------------------------------------------4-ACQUISITIONS In March 1993, the company announced the AND BUSINESS establishment of a joint venture with Japan's largest INVESTMENTS brewer, Kirin Brewery, to market and sell Budweiser in Japan. The joint venture replaces a prior license-brewing contract in Japan and is 90% owned by the company and 10% owned by Kirin. The joint venture began operations in September 1993. In June 1993, the company announced the purchase of a 17.7% equity interest in Grupo Modelo, Mexico's largest brewer, and its subsidiaries for $477 million. This investment is accounted for under the cost method and included in the balance sheet within the caption "Investments in and advances to affiliated companies." During 1993, the company recorded $8.1 million in dividends related to this investment. The agreement gives the company options to increase its investment in Grupo Modelo to a minority position of approximately 35% and to acquire an additional minority interest in its subsidiaries. These options are exercisable between mid-1995 and the end of 1997. Under certain circumstances involving the nonexercise of these options by the company at either party's election, Grupo Modelo may repurchase approximately half of the company's investment at cost and repurchase the remainder at prevailing market rates. In July 1993, the company purchased a 5% interest in China's largest brewer, Tsingtao Brewery Company Limited, for $16.4 million. The purchase occurred in

- - - --------------------------------------------------------------------------1992 Net Income Increase (Decrease) - - - --------------------------------------------------------------------------Postretirement benefits (FAS 106).................... $(319.5) Accounting for income taxes (FAS 109)................ 242.8 ------Net income impact.................................... $ (76.7) ======= Fully diluted earnings per share impact.............. $ (.26) ======== - - - ---------------------------------------------------------------------------

48
Implementation of FAS 106 in 1992 was based on benefit levels in effect at the time of adoption. Certain changes to these benefit levels were implemented in 1993, thereby reducing the pretax expense level in 1993 by $27.0 million to $48.3 million. Assuming constant statutory tax rates, FAS 109 is not expected to have a significant ongoing financial impact on the company. However, statutory tax rate changes, as occurred in August 1993, require revaluation of the deferred tax liability, with the net change recognized in the income statement in the year the tax rate change is enacted. - - - -------------------------------------------------------------------------4-ACQUISITIONS In March 1993, the company announced the AND BUSINESS establishment of a joint venture with Japan's largest INVESTMENTS brewer, Kirin Brewery, to market and sell Budweiser in Japan. The joint venture replaces a prior license-brewing contract in Japan and is 90% owned by the company and 10% owned by Kirin. The joint venture began operations in September 1993. In June 1993, the company announced the purchase of a 17.7% equity interest in Grupo Modelo, Mexico's largest brewer, and its subsidiaries for $477 million. This investment is accounted for under the cost method and included in the balance sheet within the caption "Investments in and advances to affiliated companies." During 1993, the company recorded $8.1 million in dividends related to this investment. The agreement gives the company options to increase its investment in Grupo Modelo to a minority position of approximately 35% and to acquire an additional minority interest in its subsidiaries. These options are exercisable between mid-1995 and the end of 1997. Under certain circumstances involving the nonexercise of these options by the company at either party's election, Grupo Modelo may repurchase approximately half of the company's investment at cost and repurchase the remainder at prevailing market rates. In July 1993, the company purchased a 5% interest in China's largest brewer, Tsingtao Brewery Company Limited, for $16.4 million. The purchase occurred in conjunction with Tsingtao's initial public offering on the Stock Exchange of Hong Kong. This initial 5% purchase by the company, accounted for under the cost method and included in the balance sheet within the caption "Investments in and advances to affiliated companies," is a strategic investment which may lead to additional commercial or investment relationships between the two companies. In December 1993, the company acquired the remaining 50% of International Label Company for $19.2 million. The acquisition was accounted for

Implementation of FAS 106 in 1992 was based on benefit levels in effect at the time of adoption. Certain changes to these benefit levels were implemented in 1993, thereby reducing the pretax expense level in 1993 by $27.0 million to $48.3 million. Assuming constant statutory tax rates, FAS 109 is not expected to have a significant ongoing financial impact on the company. However, statutory tax rate changes, as occurred in August 1993, require revaluation of the deferred tax liability, with the net change recognized in the income statement in the year the tax rate change is enacted. - - - -------------------------------------------------------------------------4-ACQUISITIONS In March 1993, the company announced the AND BUSINESS establishment of a joint venture with Japan's largest INVESTMENTS brewer, Kirin Brewery, to market and sell Budweiser in Japan. The joint venture replaces a prior license-brewing contract in Japan and is 90% owned by the company and 10% owned by Kirin. The joint venture began operations in September 1993. In June 1993, the company announced the purchase of a 17.7% equity interest in Grupo Modelo, Mexico's largest brewer, and its subsidiaries for $477 million. This investment is accounted for under the cost method and included in the balance sheet within the caption "Investments in and advances to affiliated companies." During 1993, the company recorded $8.1 million in dividends related to this investment. The agreement gives the company options to increase its investment in Grupo Modelo to a minority position of approximately 35% and to acquire an additional minority interest in its subsidiaries. These options are exercisable between mid-1995 and the end of 1997. Under certain circumstances involving the nonexercise of these options by the company at either party's election, Grupo Modelo may repurchase approximately half of the company's investment at cost and repurchase the remainder at prevailing market rates. In July 1993, the company purchased a 5% interest in China's largest brewer, Tsingtao Brewery Company Limited, for $16.4 million. The purchase occurred in conjunction with Tsingtao's initial public offering on the Stock Exchange of Hong Kong. This initial 5% purchase by the company, accounted for under the cost method and included in the balance sheet within the caption "Investments in and advances to affiliated companies," is a strategic investment which may lead to additional commercial or investment relationships between the two companies. In December 1993, the company acquired the remaining 50% of International Label Company for $19.2 million. The acquisition was accounted for using the purchase method of accounting and the excess cost of the acquisition over the assets acquired is being amortized on a straight-line basis over 40 years. - - - -------------------------------------------------------------------------5-INVENTORY Approximately 66.5% and 69.0% of total inventories VALUATION at December 31, 1993 and 1992, respectively, are stated on the last-in, first-out (LIFO) inventory valuation method. Had average-cost (which approximates replacement cost) been used with respect to such inventories at December 31, 1993 and 1992, total inventories would have been $105.5 million and $107.1 million higher, respectively. - - - ------------------------------------------------------------------------6-CREDIT The company's revolving credit agreements totaling AGREEMENTS $500 million were terminated January 31, 1993. The company's new credit agreements totaling $800 million expire in January 1995 ($400 million) and February

1996 ($400 million). The agreements provide that the company may select among various loan arrangements with differing maturities and among a variety of interest rates, including a negotiated rate. At December 31, 1993 and 1992 the company had no outstanding borrowings under these agreements. Fees under these agreements amounted to $.9 million in 1993, $.6 million in 1992 and $.7 million in 1991.

FINANCIAL REVIEW
- - - --------------------------------------------------------------------------Long-term debt at December 31 consisted of the follow7-LONG-TERM ing (in millions): DEBT - - - --------------------------------------------------------------------------1993 1992 - - - --------------------------------------------------------------------------Commercial paper.........................................$ 569.1 $ 79.7 Medium-term Notes Due 1993 to 2002(interest from 4.6% to 9.0%)............................................ 225.0 285.0 8% Dual Currency Japanese Yen/U.S. Dollar Notes Due 1995. 53.5 8-3/4% Notes Due July 15, 1995........................... 100.0 100.0 8% Notes Due October 1, 1996............................. 100.0 8% Convertible Debentures Due 1996....................... 237.1 237.2 8-3/4% Notes Due 1999.................................... 250.0 250.0 6.9% Notes Due 2002...................................... 200.0 200.0 9% Debentures Due 2009................................... 350.0 350.0 7-3/8% Debentures Due 2023............................... 200.0 ESOP Debt Guarantee...................................... 406.5 434.4 Sinking Fund Debentures.................................. 364.6 413.7 Industrial Revenue Bonds................................. 110.3 115.6 Other Long-term Debt..................................... 19.1 23.4 -------- -------$3,031.7 $2,642.5 - - - --------------------------------------------------------------------------The company's sinking fund debentures at December 31 are as follows (in millions): - - - --------------------------------------------------------------------------1993 1992 - - - --------------------------------------------------------------------------8-5/8% Debentures maturing 1997 to 2016.................. $150.0 50.0 8-1/2% Debentures maturing 1998 to 2017.................. 150.0 150.0 10% Debentures maturing 1999 to 2018..................... 150.9 200.0 Less: Debentures held in treasury........................ (86.3) (86.3) ----------$364.6 $413.7 - - - ---------------------------------------------------------------------------

The company utilizes SEC shelf registration statements to provide financing flexibility. At December 31, 1992, a total of $550 million was available for debt issuance under shelf registra- tion statements. In 1993, the company issued $210 million in debt. As of December 31, 1993, the company had a total of $340 million remaining available for issuance under shelf registration statements. In 1989 the company registered with the SEC $300 million of convertible debentures as part of its Beer Wholesaler Investment Program, $241.7 million of which were issued to Qualified Holders. The debentures may only be held by a qualified, independently owned beer wholesaler (and certain related parties) and may be converted into a 5% convertible preferred stock, par value $1.00, at a conversion price of $47.60 per share. Each share of the convertible preferred stock may be converted into one share of the company's common stock. The convertible debentures and convertible preferred stock are subject to mandatory redemption at the end of seven years, optional redemption/repurchase at the company's or holder's discretion after three years, and special redemption/repurchase options based upon the occurrence of certain events with respect to particular holders. During 1993, the company redeemed the following long-term debt: - $53.5 million, 8.0% Dual Currency Notes; - $100 million, 8.0% Notes; and - $49.1 million, 10% Sinking Fund Debentures Gains/losses on these redemptions (either individually or in the

FINANCIAL REVIEW
- - - --------------------------------------------------------------------------Long-term debt at December 31 consisted of the follow7-LONG-TERM ing (in millions): DEBT - - - --------------------------------------------------------------------------1993 1992 - - - --------------------------------------------------------------------------Commercial paper.........................................$ 569.1 $ 79.7 Medium-term Notes Due 1993 to 2002(interest from 4.6% to 9.0%)............................................ 225.0 285.0 8% Dual Currency Japanese Yen/U.S. Dollar Notes Due 1995. 53.5 8-3/4% Notes Due July 15, 1995........................... 100.0 100.0 8% Notes Due October 1, 1996............................. 100.0 8% Convertible Debentures Due 1996....................... 237.1 237.2 8-3/4% Notes Due 1999.................................... 250.0 250.0 6.9% Notes Due 2002...................................... 200.0 200.0 9% Debentures Due 2009................................... 350.0 350.0 7-3/8% Debentures Due 2023............................... 200.0 ESOP Debt Guarantee...................................... 406.5 434.4 Sinking Fund Debentures.................................. 364.6 413.7 Industrial Revenue Bonds................................. 110.3 115.6 Other Long-term Debt..................................... 19.1 23.4 -------- -------$3,031.7 $2,642.5 - - - --------------------------------------------------------------------------The company's sinking fund debentures at December 31 are as follows (in millions): - - - --------------------------------------------------------------------------1993 1992 - - - --------------------------------------------------------------------------8-5/8% Debentures maturing 1997 to 2016.................. $150.0 50.0 8-1/2% Debentures maturing 1998 to 2017.................. 150.0 150.0 10% Debentures maturing 1999 to 2018..................... 150.9 200.0 Less: Debentures held in treasury........................ (86.3) (86.3) ----------$364.6 $413.7 - - - ---------------------------------------------------------------------------

The company utilizes SEC shelf registration statements to provide financing flexibility. At December 31, 1992, a total of $550 million was available for debt issuance under shelf registra- tion statements. In 1993, the company issued $210 million in debt. As of December 31, 1993, the company had a total of $340 million remaining available for issuance under shelf registration statements. In 1989 the company registered with the SEC $300 million of convertible debentures as part of its Beer Wholesaler Investment Program, $241.7 million of which were issued to Qualified Holders. The debentures may only be held by a qualified, independently owned beer wholesaler (and certain related parties) and may be converted into a 5% convertible preferred stock, par value $1.00, at a conversion price of $47.60 per share. Each share of the convertible preferred stock may be converted into one share of the company's common stock. The convertible debentures and convertible preferred stock are subject to mandatory redemption at the end of seven years, optional redemption/repurchase at the company's or holder's discretion after three years, and special redemption/repurchase options based upon the occurrence of certain events with respect to particular holders. During 1993, the company redeemed the following long-term debt: - $53.5 million, 8.0% Dual Currency Notes; - $100 million, 8.0% Notes; and - $49.1 million, 10% Sinking Fund Debentures Gains/losses on these redemptions (either individually or in the aggregate) were not material to the company's Consolidated Financial Statements. At December 31, 1993 and 1992, there were $569.1 million and $79.7 million, respectively, of commercial paper borrowings outstanding classified as long-term debt. The commercial paper is intended to be maintained on a long-term basis with ongoing credit provided by the company's revolving credit agreements.

The company's Dual Currency Japanese Yen/U.S. Dollar Notes were issued at a discount from the redemption value and subsequently converted into a U.S. dollar liability resulting in an effective interest rate of

The company's Dual Currency Japanese Yen/U.S. Dollar Notes were issued at a discount from the redemption value and subsequently converted into a U.S. dollar liability resulting in an effective interest rate of 10%, as compared to a stated rate of 8%. This debt was redeemed during 1993. The company had fully hedged its foreign currency exposure for interest payments related to this debt through an agreement with an international lending institution. During 1992 the company entered into a financial fixed-rate swap agreement on a notional amount of $200 million. The company is obligated to pay a fixed rate of 6.54% per year for the four-year period beginning January 1, 1994. In return, the company will receive a floating interest rate based on commercial paper rates. The aggregate maturities on all long-term debt are $31, $287, $270, $50 and $76 million, respectively, for each of the years ending December 31, 1994 through 1998. These aggregate maturities do not include the future maturities of the ESOP debt guarantee. - - - --------------------------------------------------------------------------8-STOCK The company had an Incentive Stock Option/NonOPTION PLANS Qualified Stock Option Plan and a Non-Qualified Stock Option Plan for certain qualified employees which expired on December 21, 1991. Under the terms of the plans, options were granted at not less than the fair market value of the shares at the date of grant. The Non-Qualified Stock Option Plan provided that optionees could be granted Stock Appreciation Rights (SARs) in tandem with stock options. The exercise of a SAR cancels the related option and the exercise of an option cancels the related SAR. At December 31, 1993 and 1992, a total of 2,778,824 and 3,350, 952 shares, respectively, were reserved for possible future issuance under these plans. In April 1990, the shareholders approved an Incentive Stock Plan for certain qualified employees. The plan (as amended) provides for the grant of options and SARs. Under the terms of the plan, options may be granted at not less than the fair market value of the shares at the date of grant. At December 31, 1993 and 1992, a total of 19,051,066 and 9,908,929 shares, respectively, were reserved for future issuance under this plan. Presented below is a summary of activity for the

plans for the years ended December 31:
-----------------------------------------------------------------------------------------1993 1992 1991 -----------------------------------------------------------------------------------------Options outstanding at beginning of the year. 10,887,085 12,285,133 15,224,650 Options granted during the year.............. 2,023,400 2,213,026 668,516 Options and SARs exercised during the year... (1,399,573) (3,464,070) (3,390,645) Options cancelled during the year............ (147,703) (147,004) (217,388) ------------ ------------- ------------Options outstanding at end of the year....... 11,363,209 10,887,085 12,285,133 ------------ ------------- ------------Options exercisable at end of the year....... 8,009,951 8,298,103 8,859,962 ------------- ------------- ------------Option price range per share................. $12.28-$58.56 $10.31-$58.56 $10.31-$56.00 ------------------------------------------------------------------------------------------

The plans provide for acceleration of exercisability of the options upon the occurrence of certain events relating to a change of control, merger, sale of assets or liquidation of the company (Acceleration Events). The Non-Qualified Plan and the Incentive Stock Plan also provide that optionees may be granted

Limited Stock Appreciation Rights (LSARs). LSARs become exercisable, in lieu of the option or SAR, upon the occurrence, six months following the date of grant, of an Acceleration Event. These LSARs entitle the holder to a cash payment per share equivalent to the excess of the share value (under terms of the LSAR) over the grant price. As of December 31, 1993 and 1992, there were 1,411,379 and 1,618,278 respectively, of LSARs outstanding. - - - --------------------------------------------------------------------------9-EMPLOYEE In 1989, the company added an Employee Stock STOCK Ownership Plan (ESOP) to its existing Deferred Income OWNERSHIP Stock Purchase and Savings Plans. Approximately 60% of PLAN all salaried and hourly employees are eligible for participation in the ESOP. The ESOP borrowed $500 million for a term of 15 years at an interest rate of 8.3% and used the proceeds to buy approximately 11.3 million shares of common stock from the company. The ESOP debt is guaranteed by the company and ESOP shares are being allocated to participants over 15 years as contributions are made to the plans. ESOP cash contributions and ESOP expense accrued during the calendar year are determined by several factors including the market price and number of shares allocated to participants, ESOP debt service, dividends on unallocated shares and the company's matching contribution. Over the 15-year life of the ESOP, total expense will equal the total cash contributions made by the company.

51

FINANCIAL REVIEW ESOP cash contributions are made in March and September, based on the plan year which ends March 31. A summary of ESOP cash contributions and dividends on unallocated ESOP shares for the three years ended December 31 is presented below (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Cash contributions.......................................... $ 39.4 $ 33.1 $ 32.6 ====== ====== ====== Dividends................................................... $ 10.6 $ 10.4 $ 10.2 ====== ====== ====== - - - -------------------------------------------------------------------------------------------

Total ESOP expense is allocated to operating expense and interest expense based upon the ratio of principal and interest payments on the debt. ESOP expense for each of the three years ended December 31 is presented below (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Operating expenses......................................... $ 18.6 $ 14.2 $ 13.2 Interest expenses.......................................... 21.8 18.8 19.9 ---------------Total expense.............................................. $ 40.4 $ 33.0 $ 33.1 - - - -------------------------------------------------------------------------------------------

- - - ---------------------------------------------------------------------As discussed in Note 2, in September 1993 the 10-RETIREMENT company announced a Profitability Enhancement Program BENEFITS that included an enhanced retirement program. Total costs related to the enhanced retirement program were $142 million. Included in this cost was $90 million in

FINANCIAL REVIEW ESOP cash contributions are made in March and September, based on the plan year which ends March 31. A summary of ESOP cash contributions and dividends on unallocated ESOP shares for the three years ended December 31 is presented below (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Cash contributions.......................................... $ 39.4 $ 33.1 $ 32.6 ====== ====== ====== Dividends................................................... $ 10.6 $ 10.4 $ 10.2 ====== ====== ====== - - - -------------------------------------------------------------------------------------------

Total ESOP expense is allocated to operating expense and interest expense based upon the ratio of principal and interest payments on the debt. ESOP expense for each of the three years ended December 31 is presented below (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Operating expenses......................................... $ 18.6 $ 14.2 $ 13.2 Interest expenses.......................................... 21.8 18.8 19.9 ---------------Total expense.............................................. $ 40.4 $ 33.0 $ 33.1 - - - -------------------------------------------------------------------------------------------

- - - ---------------------------------------------------------------------As discussed in Note 2, in September 1993 the 10-RETIREMENT company announced a Profitability Enhancement Program BENEFITS that included an enhanced retirement program. Total costs related to the enhanced retirement program were $142 million. Included in this cost was $90 million in special pension benefits, offset by $35 million in curtailment gains (for a net cost of $55 million). Additionally, a $23.5 million charge for postretirement benefits other than pensions is included in the total cost. The remaining portion of the cost relates to severance benefits and other expenses of implementing the plan. PENSION PLANS The company has pension plans covering substantially all of its employees. Total pension expense for each of the three years ended December 31 is presented below

(in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Single-employer defined benefit plans........................ $ (2.5) $ (3.9) $ (3.5) Multi-employer plans......................................... 48.4 47.4 47.6 Defined contribution plans................................... 13.2 12.6 11.6 ----------------$ 59.1 $ 56.1 $ 55.7 - - - -------------------------------------------------------------------------------------------

Net pension benefit for single-employer defined benefit plans was comprised of the following for the three years ended December 31 (in millions):
- - - -------------------------------------------------------------------------------------------

1993 1992 1991 - - - ------------------------------------------------------------------------------------------Service cost (benefits earned during the year)............... $ 45.7 $ 42.0 $ 34.0 Interest cost on projected benefit obligation................ 65.1 60.0 54.1 Assumed return on assets..................................... (99.5) (92.3) (76.6) Amortization of prior service cost, actuarial gains/losses and the excess of market value of plan assets over projected benefit obligation at January 1, 1986......................................... (13.8) (13.6) (15.0) ---------------Net pension benefit...................................... $ (2.5) $ (3.9) $ (3.5) - - - ------------------------------------------------------------------------------------------

52

The key actuarial assumptions used in determining pension expense for single-employer defined benefit plans were as follows for each of the years ended December 31:
- - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Discount rate............................................... 9.0% 9.0% 10.0% Long-term rate of return on plan assets..................... 10.0% 10.0% 9.0% Weighted-average rate of compensation increase.............. 6.5% 6.5% 6.5% - - - -------------------------------------------------------------------------------------------

The actual gain on pension assets was $120.4 million, $102.2 million and $145.7 million in 1993, 1992 and 1991, respectively. The following tables set forth the funded status of all company single-employer defined benefit plans at December 31 (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 - - - ------------------------------------------------------------------------------------------Plan assets at fair market value-primarily corporate equity securities and publicly traded bonds...........................$ 1,020.0 $1,117.4 ---------------Accumulated benefit obligation: Vested benefits................................................ (721.2) (576.1) Nonvested benefits............................................. (58.2) (40.3) ---------------Accumulated benefit obligation................................... (779.4) (616.4) Effect of projected compensation increases....................... (135.1) (152.8) ---------------Projected benefit obligation..................................... (914.5) (769.2) ---------------Plan assets in excess of projected benefit obligation............$ 105.5 $ 348.2 - - - ------------------------------------------------------------------------------------------- - - ------------------------------------------------------------------------------------------1993 1992 - - - ------------------------------------------------------------------------------------------Plan assets in excess of projected benefit obligation consist of the following components: Unamortized excess of market value of plan assets over projected benefit obligation at January 1, 1986 being amortized over 15 years......................................$ 70.9 $ 119.1 Unrecognized net actuarial gains/(losses)...................... (70.9) 73.9 Prior service costs............................................ (43.7) (27.8) Prepaid pension................................................ 149.2 183.0 -----------$105.5 $ 348.2 - - - ------------------------------------------------------------------------------------------

The assumptions used in determining the funded status of these plans as of December 31 were as follows:

The key actuarial assumptions used in determining pension expense for single-employer defined benefit plans were as follows for each of the years ended December 31:
- - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Discount rate............................................... 9.0% 9.0% 10.0% Long-term rate of return on plan assets..................... 10.0% 10.0% 9.0% Weighted-average rate of compensation increase.............. 6.5% 6.5% 6.5% - - - -------------------------------------------------------------------------------------------

The actual gain on pension assets was $120.4 million, $102.2 million and $145.7 million in 1993, 1992 and 1991, respectively. The following tables set forth the funded status of all company single-employer defined benefit plans at December 31 (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 - - - ------------------------------------------------------------------------------------------Plan assets at fair market value-primarily corporate equity securities and publicly traded bonds...........................$ 1,020.0 $1,117.4 ---------------Accumulated benefit obligation: Vested benefits................................................ (721.2) (576.1) Nonvested benefits............................................. (58.2) (40.3) ---------------Accumulated benefit obligation................................... (779.4) (616.4) Effect of projected compensation increases....................... (135.1) (152.8) ---------------Projected benefit obligation..................................... (914.5) (769.2) ---------------Plan assets in excess of projected benefit obligation............$ 105.5 $ 348.2 - - - ------------------------------------------------------------------------------------------- - - ------------------------------------------------------------------------------------------1993 1992 - - - ------------------------------------------------------------------------------------------Plan assets in excess of projected benefit obligation consist of the following components: Unamortized excess of market value of plan assets over projected benefit obligation at January 1, 1986 being amortized over 15 years......................................$ 70.9 $ 119.1 Unrecognized net actuarial gains/(losses)...................... (70.9) 73.9 Prior service costs............................................ (43.7) (27.8) Prepaid pension................................................ 149.2 183.0 -----------$105.5 $ 348.2 - - - ------------------------------------------------------------------------------------------

The assumptions used in determining the funded status of these plans as of December 31 were as follows:
- - - ------------------------------------------------------------------------------------------1993 1992 - - - ------------------------------------------------------------------------------------------Discount rate....................................................... 7.5% 9.0% Weighted-average rate of compensation increase ..................... 5.5% 6.5% - - - -------------------------------------------------------------------------------------------

The decline in the funded status of the plans in 1993 is due to assets paid to retirees in conjunction with the enhanced retirement program and the lower discount rate. Contributions to multi-employer plans in which the company and its subsidiaries participate are determined in accordance with the provisions of negotiated labor contracts and are based on employee-hours worked. POSTRETIREMENT BENEFITS

As discussed in Note 3, the company adopted FAS 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," effective January 1, 1992. The company provides certain health care and life insurance benefits to eligible retired employees. Salaried participants generally become eligible for retiree health care benefits after reaching age 55 with 10 years of service or after reaching age 65. Bargaining unit employees generally become eligible for retiree health care benefits after reaching age 55 with 10-15 years of service or after reaching age 65. 53

FINANCIAL REVIEW The following table sets forth the accumulated postretirement benefit obligation (APBO) and the total postretirement benefit liability for all single-employer defined benefit plans at December 31 (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 - - - ------------------------------------------------------------------------------------------Retirees............................................................$191.7 $ 110.6 Fully eligible active plan participants............................. 139.0 146.0 Other active plan participants...................................... 232.6 304.4 ------------Accumulated postretirement benefit obligation (APBO)................ 563.3 561.0 Unrecognized prior service benefits................................. 109.8 Unrecognized net actuarial (losses)................................. (51.2) ------------Total postretirement benefit liability..............................$621.9 $ 561.0 ====== ======== - - - -------------------------------------------------------------------------------------------

As of December 31, 1993 and 1992, $607.1 million and $538.3 million of this obligation was classified as a long-term liability and $14.8 million and $22.7 million was classified as a current liability, respectively. Net periodic postretirement benefits expense for single-employer defined benefit plans for 1993 and 1992 was comprised of the following (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 - - - ------------------------------------------------------------------------------------------Service cost (benefits attributed to service during the year).......$ 21.1 $ 29.8 Interest cost on accumulated postretirement benefit obligation...... 39.2 45.5 Amortization of prior service (benefit)............................. (6.5) Amortization of curtailment loss/(gain)............................. (4.5) Amortization of actuarial loss/(gain)............................... (1.0) ------------Net periodic postretirement benefits expense........................$ 48.3 $ 75.3 ====== ======== - - - ------------------------------------------------------------------------------------------

In measuring the APBO, a 12.5% annual trend rate for health care costs was assumed for 1993. This rate is assumed to decline ratably over the next 12 years to 6.5% and remain at that level thereafter. The weighted average discount rate used in determining the APBO was 8% and 9%, respectively, at December 31, 1993 and 1992. If the assumed health care cost rate changed by 1%, the APBO as of December 31, 1993 would change by 13.4%. The effect of a 1% change in the cost trend rate on the service and interest cost components of net periodic postretirement benefits expense would be a change of 17.4%.

The provision for income taxes consists of the 11-INCOME TAXES following for the three years ended December 31 (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - -------------------------------------------------------------------------------------------

FINANCIAL REVIEW The following table sets forth the accumulated postretirement benefit obligation (APBO) and the total postretirement benefit liability for all single-employer defined benefit plans at December 31 (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 - - - ------------------------------------------------------------------------------------------Retirees............................................................$191.7 $ 110.6 Fully eligible active plan participants............................. 139.0 146.0 Other active plan participants...................................... 232.6 304.4 ------------Accumulated postretirement benefit obligation (APBO)................ 563.3 561.0 Unrecognized prior service benefits................................. 109.8 Unrecognized net actuarial (losses)................................. (51.2) ------------Total postretirement benefit liability..............................$621.9 $ 561.0 ====== ======== - - - -------------------------------------------------------------------------------------------

As of December 31, 1993 and 1992, $607.1 million and $538.3 million of this obligation was classified as a long-term liability and $14.8 million and $22.7 million was classified as a current liability, respectively. Net periodic postretirement benefits expense for single-employer defined benefit plans for 1993 and 1992 was comprised of the following (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 - - - ------------------------------------------------------------------------------------------Service cost (benefits attributed to service during the year).......$ 21.1 $ 29.8 Interest cost on accumulated postretirement benefit obligation...... 39.2 45.5 Amortization of prior service (benefit)............................. (6.5) Amortization of curtailment loss/(gain)............................. (4.5) Amortization of actuarial loss/(gain)............................... (1.0) ------------Net periodic postretirement benefits expense........................$ 48.3 $ 75.3 ====== ======== - - - ------------------------------------------------------------------------------------------

In measuring the APBO, a 12.5% annual trend rate for health care costs was assumed for 1993. This rate is assumed to decline ratably over the next 12 years to 6.5% and remain at that level thereafter. The weighted average discount rate used in determining the APBO was 8% and 9%, respectively, at December 31, 1993 and 1992. If the assumed health care cost rate changed by 1%, the APBO as of December 31, 1993 would change by 13.4%. The effect of a 1% change in the cost trend rate on the service and interest cost components of net periodic postretirement benefits expense would be a change of 17.4%.

The provision for income taxes consists of the 11-INCOME TAXES following for the three years ended December 31 (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Current Tax Provision: Federal......................................................$459.5 $460.6 $386.7 State and foreign............................................ 102.9 101.3 92.4 ---------------562.4 561.9 479.1 ---------------Deferred Tax Provision: Federal..................................................... (126.2) 50.3 93.3 State and foreign........................................... (13.3) 8.8 8.4 ---------------(139.5) 59.1 101.7

The provision for income taxes consists of the 11-INCOME TAXES following for the three years ended December 31 (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Current Tax Provision: Federal......................................................$459.5 $460.6 $386.7 State and foreign............................................ 102.9 101.3 92.4 ---------------562.4 561.9 479.1 ---------------Deferred Tax Provision: Federal..................................................... (126.2) 50.3 93.3 State and foreign........................................... (13.3) 8.8 8.4 ---------------(139.5) 59.1 101.7 ---------------$422.9 $621.0 $580.8 ====== ====== ====== - - - ------------------------------------------------------------------------------------------

The deferred tax provision results from differences in the recognition of income and expense for tax and financial reporting purposes. The primary differences are related to fixed assets (tax effect of $51.5 million in 1993, $67.6 million in 1992 and $75.9 million in 1991) and the restructuring charge benefit ($184 million) in 1993. Under the liability method, at December 31, 1993 the company had deferred tax liabilities of $1,759 million and deferred tax assets of $588 million. The principal temporary differences included in deferred tax liabilities are related to fixed assets ($1,548 million). The principal temporary differences included in deferred tax assets are related to accrued postretirement benefits ($232.2 million) and other accruals and temporary differences ($355.9 million) which are not deductible for tax purposes until paid or utilized. 54

On August 10, 1993, the Revenue Reconciliation Act of 1993 was signed into law. As a result, the federal statutory income tax rate was retroactively increased, effective January 1, 1993, by 1% to 35%. This resulted in a $33 million non-recurring, after-tax, non-cash charge related to revaluation of the deferred tax liability in accordance with FAS 109. The company's effective tax rate was 43.4% in 1993, 38.4% in 1992 and 38.2% in 1991. A reconciliation between the statutory rate and the effective rate is presented below:
- - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Statutory rate..................................................35.0% 34.0% 34.0% State income taxes, net of federal benefit...................... 4.7 3.9 3.8 Revaluation of deferred tax liability........................... 3.1 Other........................................................... .6 .5 .4 ---------Effective tax rate.............................................. 43.4% 38.4% 38.2% - - - ------------------------------------------------------------------------------------------- - - --------------------------------------------------------------------------------------------------12-CASH FLOWS For purposes of the Statement of Cash Flows, all short-term investments with maturities of 90 days or less are considered cash equivalents. Such amounts include marketable securities of $4.8 million in 1993 and $104.6 million in 1992. The effect of foreign currency exchange rate fluctuations was not material for 1993, 1992 and 1991. Supplemental information with respect to the Statement of Cash Flows is presented below (in millions):

CAPTION> - - - -------------------------------------------------------------------------------------------

On August 10, 1993, the Revenue Reconciliation Act of 1993 was signed into law. As a result, the federal statutory income tax rate was retroactively increased, effective January 1, 1993, by 1% to 35%. This resulted in a $33 million non-recurring, after-tax, non-cash charge related to revaluation of the deferred tax liability in accordance with FAS 109. The company's effective tax rate was 43.4% in 1993, 38.4% in 1992 and 38.2% in 1991. A reconciliation between the statutory rate and the effective rate is presented below:
- - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Statutory rate..................................................35.0% 34.0% 34.0% State income taxes, net of federal benefit...................... 4.7 3.9 3.8 Revaluation of deferred tax liability........................... 3.1 Other........................................................... .6 .5 .4 ---------Effective tax rate.............................................. 43.4% 38.4% 38.2% - - - ------------------------------------------------------------------------------------------- - - --------------------------------------------------------------------------------------------------12-CASH FLOWS For purposes of the Statement of Cash Flows, all short-term investments with maturities of 90 days or less are considered cash equivalents. Such amounts include marketable securities of $4.8 million in 1993 and $104.6 million in 1992. The effect of foreign currency exchange rate fluctuations was not material for 1993, 1992 and 1991. Supplemental information with respect to the Statement of Cash Flows is presented below (in millions):

CAPTION> - - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Interest paid, net of capitalized interest...................$ 168.6 $ 158.0 $ 205.8 Income taxes paid............................................ 510.2 552.3 480.0 Excise taxes paid............................................ 1,673.4 1,663.0 1,606.6 - - - ------------------------------------------------------------------------------------------CHANGES IN NON-CASH WORKING CAPITAL Decrease/(increase) in non-cash current assets: Accounts receivable........................................$ (101.3) $ 5.0 $ (92.2) Inventories................................................ 34.0 (25.1) (68.4) Other current assets....................................... .3 (50.3) (38.8) Increase/(decrease) in current liabilities: Accounts payable........................................... 75.1 27.6 (1.4) Accrued salaries, wages and benefits....................... (13.4) 34.0 (24.0) Accrued interest payable................................... 2.5 (6.1) (13.8) Due to customers for returnable containers................. 2.1 3.7 (.1) Accrued taxes, other than income taxes..................... 4.7 6.1 39.4 Estimated income taxes..................................... 52.2 (6.4) (34.0) Other current liabilities.................................. 43.4 (1.9) 24.8 -----------------Decrease/(increase) in non-cash working capital.............. $ 99.6 $ (13.4) $(208.5) - - - -------------------------------------------------------------------------------------------

55

FINANCIAL REVIEW STOCK ACTIVITY 13-PREFERRED Activity in the company's stock categories for AND COMMON each of the three years ended December 31 is STOCK summarized below:
- - - ---------------------------------------------------------------------------------Common Stock Common Stock Issued In Treasury

FINANCIAL REVIEW STOCK ACTIVITY 13-PREFERRED Activity in the company's stock categories for AND COMMON each of the three years ended December 31 is STOCK summarized below:
- - - ---------------------------------------------------------------------------------Common Stock Common Stock Issued In Treasury - - - ---------------------------------------------------------------------------------BALANCE, DECEMBER 31, 1990....................... 335,683,313 (53,377,060) Shares issued under stock plan................... 2,696,554 Conversions of Convertible Debentures............ 72,477 Treasury stock acquired.......................... (23,500) - - - ---------------------------------------------------------------------------------BALANCE, DECEMBER 31, 1991....................... 338,452,344 (53,400,560) Shares issued under stock plans.................. 2,931,179 Conversions of Convertible Debentures............ 16,805 Treasury stock acquired.......................... (9,597,492) - - - ---------------------------------------------------------------------------------BALANCE, DECEMBER 31, 1992....................... 341,400,328 (62,998,052) Shares issued under stock plans.................. 1,180,011 Conversions of Convertible Debentures............ 2,100 Treasury stock acquired.......................... (12,643,125) Treasury stock issued............................ 95,413 - - - ---------------------------------------------------------------------------------BALANCE, DECEMBER 31, 1993....................... 342,582,439 (75,545,764) - - - ----------------------------------------------------------------------------------

At December 31, 1993 and 1992, 40,000,000 shares of $1.00 par value preferred stock were authorized and unissued. STOCK REPURCHASE PROGRAMS The Board of Directors has approved various resolutions authorizing the company to purchase shares of its common stock for investment purposes and to meet the requirements of the company's various stock purchase and incentive plans. In June 1992 the board authorized the repurchase of 20 million shares. The company has acquired 12.6 million, 9.6 million and 23,500 shares of common stock in 1993, 1992 and 1991 for $639.8 million, $518.7 million and $1.1 million, respectively. At December 31, 1993, approximately 5.0 million shares were available for repurchase under the 1992 authorization. STOCKHOLDER RIGHTS PLAN In 1985, the Board of Directors adopted a Stockholder Rights Plan pursuant to which the board declared a dividend of one preferred stock purchase right on each outstanding share of common stock of the company. The rights have subsequently been amended in certain respects, and the description below reflects the terms of the rights as amended. After the rights become exercisable and until such time as the rights expire or are redeemed, they will entitle the holder to purchase one one-hundredth of a share of a new Series B Junior Participating Preferred Stock, par value $1.00 per share (4,000,000 shares were reserved for issuance at December 31, 1993 and 1992), at a purchase price of $50 per one one-hundredth of a share. The rights will become exercisable on the earlier to occur of (i) the tenth calendar day following a public announcement that a person or group (an "Acquiring Person") has acquired 20% or more of the common stock of the company, or (ii) the tenth business day following the commencement of a tender offer or exchange offer by a third party which, upon consummation, would result in such party's control of 30% or more of the common stock of the company. If, at any time after the rights have become non- redeemable, the company is the surviving corporation in a merger with an Acquiring Person and its common stock is not changed or exchanged, or an Acquiring Person becomes the beneficial owner of more than 30% of the then outstanding shares of common stock, each right will entitle the holder, other than the Acquiring Person, to purchase that number of shares of common stock of the company which has a market value of twice the exercise price of the right. If, at any time after the rights have become non- redeemable, the company is acquired in a merger or other business combination transaction or 50% or more of its assets or earning power is sold, each right will entitle its holder to purchase that number of shares of common stock of the acquiring company which has a market value of twice the exercise price of the right.

company which has a market value of twice the exercise price of the right. 56
The rights, which do not have voting rights, expire on December 27, 1995, and may be redeemed by the company at a price of 2-1/2 cents per right at any time prior to expiration or the date on which the company's Board of Directors permits the rights to become non-redeemable (subject to reinstatement in certain circumstances). - - - --------------------------------------------------------------------------14-COMMITMENTS In connection with plant expansion and improvement AND programs, the company had commitments for capital CONTINGENCIES expenditures of approximately $315.9 million at December 31, 1993. Obligations under capital and operating leases are not material. The company and certain of its subsidiaries are involved in certain claims and legal proceedings in which monetary damages and other relief are sought. The company is vigorously contesting these claims. However, resolution of these claims is not expected to occur quickly, and their ultimate outcome cannot presently be predicted. In any event, it is the opinion of management that any liability of the company or its subsidiaries for claims or proceedings will not materially affect its financial position. - - - --------------------------------------------------------------------------15-BUSINESS The company's principal business segments are beer SEGMENTS and beer-related, food products and entertainment. The beer and beer-related segment produces and sells the company's beer products. Included in this segment are the company's raw material acquisition, malting, can manufacturing, recycling, communications and transportation operations. The food products segment consists of the company's food and food-related operations which include the company's baking and snack food subsidiaries and certain rice operations. The entertainment segment consists of the company's theme parks, baseball, stadium and real estate development operations. Sales between segments, export sales and non-United States sales are not material. The company's equity in earnings of affiliated companies has been included in other income and expense. No single customer accounted for more than 10% of sales. Summarized below is the company's business segment information for 1993, 1992 and 1991 (in millions). Intra-segment sales have been eliminated from each segment's reported net sales.

- - - ------------------------------------------------------------------------------------------Net Sales Operating Income (1) (2) - - - ------------------------------------------------------------------------------------------1993 1992 1991 1993 1992 1991 - - - ------------------------------------------------------------------------------------------Beer and Beer-Related........$ 8,668.9 $ 8,609.6 $ 8,323.5 $1,339.6 $1,645.4 $1,581.5 Food Products................ 2,123.2 2,131.1 2,068.7 (84.9) 75.4 95.0 Entertainment................ 741.8 684.3 617.9 (42.8) 54.9 45.0 Eliminations................. (28.6) (31.3) (13.8) --------- --------- ---------------- -------- -------Consolidated.................$11,505.3 $11,393.7 $10,996.3 $1,211.9 $1,775.7 $1,721.5 ========= ========= ========= ======== ======== ======== - - - ------------------------------------------------------------------------------------------(1) Operating income excludes other expense, net, which is not allocated among segments. For 1993, 1992 and 1991 other expense, net of $161.5 million, $160.5 million and $200.9 million, respectively, includes net interest expense, other income and expense, and equity in earnings of affiliated companies. (2) Operating income for 1993 includes the impact of the one-time, pretax restructuring charge of $565 million as a result of the company's Profitability Enhancement Program. The one-time charge relates to business segments as follows: $267.5 million for the

The rights, which do not have voting rights, expire on December 27, 1995, and may be redeemed by the company at a price of 2-1/2 cents per right at any time prior to expiration or the date on which the company's Board of Directors permits the rights to become non-redeemable (subject to reinstatement in certain circumstances). - - - --------------------------------------------------------------------------14-COMMITMENTS In connection with plant expansion and improvement AND programs, the company had commitments for capital CONTINGENCIES expenditures of approximately $315.9 million at December 31, 1993. Obligations under capital and operating leases are not material. The company and certain of its subsidiaries are involved in certain claims and legal proceedings in which monetary damages and other relief are sought. The company is vigorously contesting these claims. However, resolution of these claims is not expected to occur quickly, and their ultimate outcome cannot presently be predicted. In any event, it is the opinion of management that any liability of the company or its subsidiaries for claims or proceedings will not materially affect its financial position. - - - --------------------------------------------------------------------------15-BUSINESS The company's principal business segments are beer SEGMENTS and beer-related, food products and entertainment. The beer and beer-related segment produces and sells the company's beer products. Included in this segment are the company's raw material acquisition, malting, can manufacturing, recycling, communications and transportation operations. The food products segment consists of the company's food and food-related operations which include the company's baking and snack food subsidiaries and certain rice operations. The entertainment segment consists of the company's theme parks, baseball, stadium and real estate development operations. Sales between segments, export sales and non-United States sales are not material. The company's equity in earnings of affiliated companies has been included in other income and expense. No single customer accounted for more than 10% of sales. Summarized below is the company's business segment information for 1993, 1992 and 1991 (in millions). Intra-segment sales have been eliminated from each segment's reported net sales.

- - - ------------------------------------------------------------------------------------------Net Sales Operating Income (1) (2) - - - ------------------------------------------------------------------------------------------1993 1992 1991 1993 1992 1991 - - - ------------------------------------------------------------------------------------------Beer and Beer-Related........$ 8,668.9 $ 8,609.6 $ 8,323.5 $1,339.6 $1,645.4 $1,581.5 Food Products................ 2,123.2 2,131.1 2,068.7 (84.9) 75.4 95.0 Entertainment................ 741.8 684.3 617.9 (42.8) 54.9 45.0 Eliminations................. (28.6) (31.3) (13.8) --------- --------- ---------------- -------- -------Consolidated.................$11,505.3 $11,393.7 $10,996.3 $1,211.9 $1,775.7 $1,721.5 ========= ========= ========= ======== ======== ======== - - - ------------------------------------------------------------------------------------------(1) Operating income excludes other expense, net, which is not allocated among segments. For 1993, 1992 and 1991 other expense, net of $161.5 million, $160.5 million and $200.9 million, respectively, includes net interest expense, other income and expense, and equity in earnings of affiliated companies. (2) Operating income for 1993 includes the impact of the one-time, pretax restructuring charge of $565 million as a result of the company's Profitability Enhancement Program. The one-time charge relates to business segments as follows: $267.5 million for the beer and beer-related segment; $165.9 million for the food products segment; and $131.6 million for the entertainment segment. /TABLE

- - - ------------------------------------------------------------------------------------------Depreciation and Identifiable Assets Amortization Expense (4) - - - ------------------------------------------------------------------------------------------1993 1992 1991 1993 1992 1991 - - - ------------------------------------------------------------------------------------------Beer and Beer-Related....... $ 7,515.0 $ 6,864.8 $6,660.6 $429.2 $395.1 $381.4 Food Products............... 1,510.4 1,584.1 1,359.7 103.0 100.9 89.5 Entertainment............... 1,470.5 1,588.2 1,565.7 76.1 71.0 63.2 Corporate (3)............... 384.4 500.8 400.5 --------- --------- -------------------------Consolidated................ $10,880.3 $10,537.9 $9,986.5 $608.3 $567.0 $534.1 ========= ========= ======== ====== ======= ======= - - - ------------------------------------------------------------------------------------------(3) Corporate assets principally include cash, marketable securities, investment in affiliated companies and certain fixed assets. (4) Consolidated depreciation and amortization expenses include $17.4 million, $15.8 million and $16.0 million of depreciation expense related to corporate assets for 1993, 1992 and 1991, respectively.

57

FINANCIAL REVIEW
----------------------------------------------CAPITAL EXPENDITURES - - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Beer and Beer-Related......................... $529.7 $490.4 $511.5 Food Products................................. 122.7 109.5 82.5 Entertainment................................. 124.5 137.3 108.5 ---------------Consolidated.................................. $776.9 $737.2 $702.5 ====== ====== ====== - - - ------------------------------------------------------------------------------------------- - - --------------------------------------------------------------------------------------------------Additional income statement information (in millions): 16-ADD - - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Maintenance....................... $415.5 $403.0 $405.4 ====== ====== ====== Advertising costs................. $701.6 $747.6 $682.6 ====== ====== ====== - - - -------------------------------------------------------------------------------------------

Summarized below is selected financial information for Anheuser-Busch, Inc. (a wholly owned subsidiary of Anheuser-Busch Companies, Inc.) as of and for the years ended December 31 (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Income Statement Information: Net sales.................... $ 7,624.0 $7,669.9 $7,475.4 Gross profit................. 2,844.8 2,875.6(2) 2,707.5 Net income (1)............... 712.7(3) 860.5(2) 829.4 Balance Sheet Information: Current assets............... 670.6 667.8 Non-current assets........... 11,185.6 9,945.4 Current liabilities.......... 813.2 693.7 Non-current liabilities (1).. 3,431.4 3,020.6 - - - ------------------------------------------------------------------------------------------(1) Anheuser-Busch, Inc. is co-obligor for all outstanding Anheuser-Busch Companies, Inc. indebtedness. Accordingly, all such debt is included as an element of non-current liabilities and the interest thereon is included in the determination of net income. (2) Gross profit and net income for 1992 reflect the January 1, 1992 adoption of FAS 106.

- - - ------------------------------------------------------------------------------------------Depreciation and Identifiable Assets Amortization Expense (4) - - - ------------------------------------------------------------------------------------------1993 1992 1991 1993 1992 1991 - - - ------------------------------------------------------------------------------------------Beer and Beer-Related....... $ 7,515.0 $ 6,864.8 $6,660.6 $429.2 $395.1 $381.4 Food Products............... 1,510.4 1,584.1 1,359.7 103.0 100.9 89.5 Entertainment............... 1,470.5 1,588.2 1,565.7 76.1 71.0 63.2 Corporate (3)............... 384.4 500.8 400.5 --------- --------- -------------------------Consolidated................ $10,880.3 $10,537.9 $9,986.5 $608.3 $567.0 $534.1 ========= ========= ======== ====== ======= ======= - - - ------------------------------------------------------------------------------------------(3) Corporate assets principally include cash, marketable securities, investment in affiliated companies and certain fixed assets. (4) Consolidated depreciation and amortization expenses include $17.4 million, $15.8 million and $16.0 million of depreciation expense related to corporate assets for 1993, 1992 and 1991, respectively.

57

FINANCIAL REVIEW
----------------------------------------------CAPITAL EXPENDITURES - - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Beer and Beer-Related......................... $529.7 $490.4 $511.5 Food Products................................. 122.7 109.5 82.5 Entertainment................................. 124.5 137.3 108.5 ---------------Consolidated.................................. $776.9 $737.2 $702.5 ====== ====== ====== - - - ------------------------------------------------------------------------------------------- - - --------------------------------------------------------------------------------------------------Additional income statement information (in millions): 16-ADD - - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Maintenance....................... $415.5 $403.0 $405.4 ====== ====== ====== Advertising costs................. $701.6 $747.6 $682.6 ====== ====== ====== - - - -------------------------------------------------------------------------------------------

Summarized below is selected financial information for Anheuser-Busch, Inc. (a wholly owned subsidiary of Anheuser-Busch Companies, Inc.) as of and for the years ended December 31 (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Income Statement Information: Net sales.................... $ 7,624.0 $7,669.9 $7,475.4 Gross profit................. 2,844.8 2,875.6(2) 2,707.5 Net income (1)............... 712.7(3) 860.5(2) 829.4 Balance Sheet Information: Current assets............... 670.6 667.8 Non-current assets........... 11,185.6 9,945.4 Current liabilities.......... 813.2 693.7 Non-current liabilities (1).. 3,431.4 3,020.6 - - - ------------------------------------------------------------------------------------------(1) Anheuser-Busch, Inc. is co-obligor for all outstanding Anheuser-Busch Companies, Inc. indebtedness. Accordingly, all such debt is included as an element of non-current liabilities and the interest thereon is included in the determination of net income. (2) Gross profit and net income for 1992 reflect the January 1, 1992 adoption of FAS 106. Excluding the adoption of FAS 106, gross profit would have been $2,907.7 million and

FINANCIAL REVIEW
----------------------------------------------CAPITAL EXPENDITURES - - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Beer and Beer-Related......................... $529.7 $490.4 $511.5 Food Products................................. 122.7 109.5 82.5 Entertainment................................. 124.5 137.3 108.5 ---------------Consolidated.................................. $776.9 $737.2 $702.5 ====== ====== ====== - - - ------------------------------------------------------------------------------------------- - - --------------------------------------------------------------------------------------------------Additional income statement information (in millions): 16-ADD - - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Maintenance....................... $415.5 $403.0 $405.4 ====== ====== ====== Advertising costs................. $701.6 $747.6 $682.6 ====== ====== ====== - - - -------------------------------------------------------------------------------------------

Summarized below is selected financial information for Anheuser-Busch, Inc. (a wholly owned subsidiary of Anheuser-Busch Companies, Inc.) as of and for the years ended December 31 (in millions):
- - - ------------------------------------------------------------------------------------------1993 1992 1991 - - - ------------------------------------------------------------------------------------------Income Statement Information: Net sales.................... $ 7,624.0 $7,669.9 $7,475.4 Gross profit................. 2,844.8 2,875.6(2) 2,707.5 Net income (1)............... 712.7(3) 860.5(2) 829.4 Balance Sheet Information: Current assets............... 670.6 667.8 Non-current assets........... 11,185.6 9,945.4 Current liabilities.......... 813.2 693.7 Non-current liabilities (1).. 3,431.4 3,020.6 - - - ------------------------------------------------------------------------------------------(1) Anheuser-Busch, Inc. is co-obligor for all outstanding Anheuser-Busch Companies, Inc. indebtedness. Accordingly, all such debt is included as an element of non-current liabilities and the interest thereon is included in the determination of net income. (2) Gross profit and net income for 1992 reflect the January 1, 1992 adoption of FAS 106. Excluding the adoption of FAS 106, gross profit would have been $2,907.7 million and net income would have been $883.1 million, respectively. (3) Net income for 1993 reflects $89.6 million representing Anheuser-Busch, Inc.'s share of the $565 million pretax restructuring charge.

58
- - - --------------------------------------------------------------------------17-QUARTERLY Summarized quarterly financial data for 1993 and FINANCIAL 1992 (in millions, except per share data) DATA appears below. Gross profit, net income and

(UNAUDITED) earnings per share for each quarter of 1992 have been retroactively restated to reflect the company's adoption, as of January 1, 1992, of FAS 106 and FAS 109.
------------------------EARNINGS/(LOSS) PER SHARE ------------------------------------------------------------------------------------------------------- - - NET SALES GROSS PROFIT NET INCOME/(LOSS) PRIMARY FULLY DILUTED - - - --------------------------------------------------------------------------------------------------1993 1992 1993 1992 1993 1992 1993 1992 1993 1992

- - - --------------------------------------------------------------------------17-QUARTERLY Summarized quarterly financial data for 1993 and FINANCIAL 1992 (in millions, except per share data) DATA appears below. Gross profit, net income and

(UNAUDITED) earnings per share for each quarter of 1992 have been retroactively restated to reflect the company's adoption, as of January 1, 1992, of FAS 106 and FAS 109.
------------------------EARNINGS/(LOSS) PER SHARE ------------------------------------------------------------------------------------------------------- - - NET SALES GROSS PROFIT NET INCOME/(LOSS) PRIMARY FULLY DILUTED - - - --------------------------------------------------------------------------------------------------1993 1992 1993 1992 1993 1992 1993 1992 1993 1992 - - - --------------------------------------------------------------------------------------------------First quarter $ 2,503.4 $ 2,621.1 $ 850.3 $ 930.9 $194.1 $138.4 $ .69 $ .48 $ .69 $ .48 Second quarter 2,990.8 2,953.4 1,092.9 1,092.8 308.6 308.4 1.12 1.07 1.11 1.06 Third quarter 3,156.7 3,091.6 1,179.3 1,139.4 (75.0) 309.1 (.28) 1.09 (.28) 1.08 Fourth quarter 2,854.4 2,727.6 963.1 921.5 166.8 161.6 .62 .58 .62 .58 - - - --------------------------------------------------------------------------------------------------Annual $11,505.3 $11,393.7 $4,085.6 $4,084.6 $594.5 $917.5 $2.17 $3.22 $2.17 $3.20 - - - ---------------------------------------------------------------------------------------------------

For accounting purposes, the net impact of the one-time cumulative effect adjustment of $76.7 million ($.26 per share) for years prior to 1992, for both FAS 106 and FAS 109, is reflected entirely in net income and earnings per share of the first quarter of 1992. Third quarter 1993 net income and earnings per share include the impact of the one-time pretax restructuring charge of $565 million related to the company's Profitability Enhancement Program and the $33 million deferred tax liability revaluation charge due to the 1% tax rate increase. Excluding these items, third quarter 1993 net income and fully diluted earnings per share would have been $311.1 million and $1.13, respectively, and net income and fully diluted earnings per share for the year would have been $980.6 million and $3.55, respectively. 59
FINANCIAL SUMMARY-OPERATIONS Anheuser-Busch Companies, Inc., and Subsidiaries (In millions, except per share data) - - - --------------------------------------------------------------------------------------------------1993 199 - - - --------------------------------------------------------------------------------------------------CONSOLIDATED SUMMARY OF OPERATIONS Barrels sold....................................................................... 87.3 8 Sales.............................................................................. $13,185.1 $13,06 Federal and state excise taxes................................................... 1,679.8 1,66 - - - --------------------------------------------------------------------------------------------------Net sales.......................................................................... 11,505.3 11,39 Cost of products and services.................................................... 7,419.7 7,30 - - - --------------------------------------------------------------------------------------------------Gross profit....................................................................... 4,085.6 4,08 Marketing, distribution and administrative expenses.............................. 2,308.7 2,30 Restructuring charge............................................................. 565.0 - - - --------------------------------------------------------------------------------------------------Operating income................................................................... 1,211.9(1) 1,77 Interest expense................................................................. (207.8) (19 Interest capitalized............................................................. 36.7 4 Interest income.................................................................. 5.2 Other income/(expense), net...................................................... 4.4 (1 - - - --------------------------------------------------------------------------------------------------Income before income taxes......................................................... 1,050.4(1) 1,61 Income taxes (current/deferred).................................................. 422.9 62 Revaluation of deferred tax liability 33.0 ------------Net income, before cumulative effect of accounting changes......................... 594.5(1) 99 Cumulative effect of changes in the method of accounting for postretirement benefits (FAS 106) and income taxes (FAS 109), net of tax benefit of $186.4 million.................................. (7 -------------

For accounting purposes, the net impact of the one-time cumulative effect adjustment of $76.7 million ($.26 per share) for years prior to 1992, for both FAS 106 and FAS 109, is reflected entirely in net income and earnings per share of the first quarter of 1992. Third quarter 1993 net income and earnings per share include the impact of the one-time pretax restructuring charge of $565 million related to the company's Profitability Enhancement Program and the $33 million deferred tax liability revaluation charge due to the 1% tax rate increase. Excluding these items, third quarter 1993 net income and fully diluted earnings per share would have been $311.1 million and $1.13, respectively, and net income and fully diluted earnings per share for the year would have been $980.6 million and $3.55, respectively. 59
FINANCIAL SUMMARY-OPERATIONS Anheuser-Busch Companies, Inc., and Subsidiaries (In millions, except per share data) - - - --------------------------------------------------------------------------------------------------1993 199 - - - --------------------------------------------------------------------------------------------------CONSOLIDATED SUMMARY OF OPERATIONS Barrels sold....................................................................... 87.3 8 Sales.............................................................................. $13,185.1 $13,06 Federal and state excise taxes................................................... 1,679.8 1,66 - - - --------------------------------------------------------------------------------------------------Net sales.......................................................................... 11,505.3 11,39 Cost of products and services.................................................... 7,419.7 7,30 - - - --------------------------------------------------------------------------------------------------Gross profit....................................................................... 4,085.6 4,08 Marketing, distribution and administrative expenses.............................. 2,308.7 2,30 Restructuring charge............................................................. 565.0 - - - --------------------------------------------------------------------------------------------------Operating income................................................................... 1,211.9(1) 1,77 Interest expense................................................................. (207.8) (19 Interest capitalized............................................................. 36.7 4 Interest income.................................................................. 5.2 Other income/(expense), net...................................................... 4.4 (1 - - - --------------------------------------------------------------------------------------------------Income before income taxes......................................................... 1,050.4(1) 1,61 Income taxes (current/deferred).................................................. 422.9 62 Revaluation of deferred tax liability 33.0 ------------Net income, before cumulative effect of accounting changes......................... 594.5(1) 99 Cumulative effect of changes in the method of accounting for postretirement benefits (FAS 106) and income taxes (FAS 109), net of tax benefit of $186.4 million.................................. (7 ------------NET INCOME......................................................................... $ 594.5(1) $ 91 ========= ===== - - - --------------------------------------------------------------------------------------------------PRIMARY EARNINGS PER SHARE: Net income before cumulative effect................................................ $ 2.17$ 3.48(2) Cumulative effect of accounting changes............................................ ( ------------Net income......................................................................... $ 2.17(1)$ 3.22 ========== ===== FULLY DILUTED EARNINGS PER SHARE: Net income before cumulative effect................................................ $ Cumulative effect of accounting changes............................................

2.17 $ ------------Net income......................................................................... $ 2.17(1) $ ========= ===== Cash dividends paid: Common stock..................................................................... 370.0 3 Per share...................................................................... 1.36 Preferred stock.................................................................. Per share...................................................................... Average number of common shares: Primary.......................................................................... 274.3 2 Fully diluted.................................................................... 279.3 2 - - - --------------------------------------------------------------------------------------------------NOTES TO FINANCIAL SUMMARY-OPERATIONS Note: All per share information and average number of common shares data reflect the September 12, 1986 t split and the June 14, 1985 three-for-one stock split. All amounts reflect the acquisition of Sea World a 1989. Financial information prior to 1988 has been restated to reflect the adoption in 1988 of Financial No. 94, Consolidation of Majority-Owned Subsidiaries.

FINANCIAL SUMMARY-OPERATIONS Anheuser-Busch Companies, Inc., and Subsidiaries (In millions, except per share data) - - - --------------------------------------------------------------------------------------------------1993 199 - - - --------------------------------------------------------------------------------------------------CONSOLIDATED SUMMARY OF OPERATIONS Barrels sold....................................................................... 87.3 8 Sales.............................................................................. $13,185.1 $13,06 Federal and state excise taxes................................................... 1,679.8 1,66 - - - --------------------------------------------------------------------------------------------------Net sales.......................................................................... 11,505.3 11,39 Cost of products and services.................................................... 7,419.7 7,30 - - - --------------------------------------------------------------------------------------------------Gross profit....................................................................... 4,085.6 4,08 Marketing, distribution and administrative expenses.............................. 2,308.7 2,30 Restructuring charge............................................................. 565.0 - - - --------------------------------------------------------------------------------------------------Operating income................................................................... 1,211.9(1) 1,77 Interest expense................................................................. (207.8) (19 Interest capitalized............................................................. 36.7 4 Interest income.................................................................. 5.2 Other income/(expense), net...................................................... 4.4 (1 - - - --------------------------------------------------------------------------------------------------Income before income taxes......................................................... 1,050.4(1) 1,61 Income taxes (current/deferred).................................................. 422.9 62 Revaluation of deferred tax liability 33.0 ------------Net income, before cumulative effect of accounting changes......................... 594.5(1) 99 Cumulative effect of changes in the method of accounting for postretirement benefits (FAS 106) and income taxes (FAS 109), net of tax benefit of $186.4 million.................................. (7 ------------NET INCOME......................................................................... $ 594.5(1) $ 91 ========= ===== - - - --------------------------------------------------------------------------------------------------PRIMARY EARNINGS PER SHARE: Net income before cumulative effect................................................ $ 2.17$ 3.48(2) Cumulative effect of accounting changes............................................ ( ------------Net income......................................................................... $ 2.17(1)$ 3.22 ========== ===== FULLY DILUTED EARNINGS PER SHARE: Net income before cumulative effect................................................ $ Cumulative effect of accounting changes............................................

2.17 $ ------------Net income......................................................................... $ 2.17(1) $ ========= ===== Cash dividends paid: Common stock..................................................................... 370.0 3 Per share...................................................................... 1.36 Preferred stock.................................................................. Per share...................................................................... Average number of common shares: Primary.......................................................................... 274.3 2 Fully diluted.................................................................... 279.3 2 - - - --------------------------------------------------------------------------------------------------NOTES TO FINANCIAL SUMMARY-OPERATIONS Note: All per share information and average number of common shares data reflect the September 12, 1986 t split and the June 14, 1985 three-for-one stock split. All amounts reflect the acquisition of Sea World a 1989. Financial information prior to 1988 has been restated to reflect the adoption in 1988 of Financial No. 94, Consolidation of Majority-Owned Subsidiaries.

60
- - - --------------------------------------------------------------------------------------------------1990 1989 1988 1987 1986 1985 1 - - - --------------------------------------------------------------------------------------------------86.5 80.7 78.5 76.1 72.3 68.0 $11,611.7 $10,283.6 $9,705.1 $9,110.4 $8,478.8 $7,756.7 $7,2 868.1 802.3 781.0 760.7 724.5 683.0 6 - - - --------------------------------------------------------------------------------------------------10,743.6 9,481.3 8,924.1 8,349.7 7,754.3 7,073.7 6,5 7,093.5 6,275.8 5,825.5 5,374.3 5,026.5 4,729.8 4,4 - - - --------------------------------------------------------------------------------------------------3,650.1 3,205.5 3,098.6 2,975.4 2,727.8 2,343.9 2,0

- - - --------------------------------------------------------------------------------------------------1990 1989 1988 1987 1986 1985 1 - - - --------------------------------------------------------------------------------------------------86.5 80.7 78.5 76.1 72.3 68.0 $11,611.7 $10,283.6 $9,705.1 $9,110.4 $8,478.8 $7,756.7 $7,2 868.1 802.3 781.0 760.7 724.5 683.0 6 - - - --------------------------------------------------------------------------------------------------10,743.6 9,481.3 8,924.1 8,349.7 7,754.3 7,073.7 6,5 7,093.5 6,275.8 5,825.5 5,374.3 5,026.5 4,729.8 4,4 - - - --------------------------------------------------------------------------------------------------3,650.1 3,205.5 3,098.6 2,975.4 2,727.8 2,343.9 2,0 2,051.1 1,876.8 1,834.5 1,826.8 1,709.8 1,498.2 1,3 -------------------------------------------------------------------------------------------------------1,599.0 1,328.7 1,264.1 1,148.6 1,018.0 845.7 7 (283.0) (177.9) (141.6) (127.5) (99.9) (96.5) (1 54.6 51.5 44.2 40.3 33.2 37.2 7.0 12.6 9.8 12.8 9.6 21.3 (25.5) 11.8 (16.4) (9.9) (13.6) (23.3) ( - - - --------------------------------------------------------------------------------------------------1,352.1 1,226.7 1,160.1 1064.3 947.3(3) 784.4 6 509.7 459.5 444.2 449.6 429.3 340.7 3 - - - --------------------------------------------842.4 767.2 715.9 614.7 518.0(3) 443.7 3

- - - --------------------------------------------$ 842.4 $ 767.2 $ 715.9 $ 614.7 $ 518.0(3) $ 443.7 $ 3 ========= ========= ======== ======== ======== ======== ==== - - - --------------------------------------------------------------------------------------------------$ 2.96 $ 2.68 $ 2.45 $ 2.04 $ 1.69(3) $ 1.42 $ 1 - - - --------------------------------------------$ 2.96 $ 2.68 $ 2.45 $ 2.04 $ 1.69(3) $ 1.42 $ 1 ========= ========= ======== ======== ======== ======== ==== $ 2.95 $ 2.68 $ 2.45 $ 2.04 $ 1.69(3) $ 1.42 $ 1 - - - --------------------------------------------$ 2.95 $ 2.68 $ 2.45 $ 2.04 $ 1.69(3) $ 1.42 $ 1 ========= ========= ======== ======== ======== ======== ==== 265.0 226.2 188.6 148.4 120.2 102.7 8 .94 .80 .66 .54 .44 .36 2/3 .3 20.1 26.9 27.0 2 3.23 3.60 3.60 3 284.6 286.2 292.2 301.5 306.6 312.6 31 289.7 286.2 292.2 301.5 306.6 312.6 31 - - - --------------------------------------------------------------------------------------------------(1) 1993 results include the impact of two non-recurring special charges. These charges are (1) a restruc ($565 million pretax) and (2) a revaluation of the deferred tax liability due to the 1% increase in f ($33 million after-tax). Excluding these non-recurring special charges, operating income, pretax inco fully diluted earnings per share would have been $1,776.9 million, $1,615.4 million, $980.6 million respectively. (2) 1992 operating income, income before income taxes, net income and earnings per share reflect the 199 new Financial Accounting Standards pertaining to Postretirement Benefits (FAS 106) and Income Taxes the financial impact of these Standards, 1992 operating income, income before income taxes, net inco earnings per share would have been $1,830.8 million, $1,676.0 million, $1,029.2 million and $3.58, r (3) Effective January 1, 1986, the company adopted the provisions of Financial Accounting Standards No. Employers' Accounting For Pensions. The financial effect of FAS 87 adoption was to increase 1986 inc taxes $45 million, net income $23 million and earnings per share $.08.

61
FINANCIAL SUMMARY-BALANCE SHEET AND OTHER INFORMATION Anheuser-Busch Companies, Inc., and Subsidiaries (In millions, except per share and statistical data) - - - --------------------------------------------------------------------------------------------------1993 1992 1991 - - - --------------------------------------------------------------------------------------------------BALANCE SHEET INFORMATION Working capital (deficit).......................... $ (20.4) $ 356.0 $ 224.9 Current ratio...................................... 1.0 1.2 1.2 Plant and equipment, net........................... 7,497.1 7,523.7 7,196.5 Long-term debt..................................... 3,031.7 2,642.5 2,644.9

FINANCIAL SUMMARY-BALANCE SHEET AND OTHER INFORMATION Anheuser-Busch Companies, Inc., and Subsidiaries (In millions, except per share and statistical data) - - - --------------------------------------------------------------------------------------------------1993 1992 1991 - - - --------------------------------------------------------------------------------------------------BALANCE SHEET INFORMATION Working capital (deficit).......................... $ (20.4) $ 356.0 $ 224.9 Current ratio...................................... 1.0 1.2 1.2 Plant and equipment, net........................... 7,497.1 7,523.7 7,196.5 Long-term debt..................................... 3,031.7 2,642.5 2,644.9 Total debt to total capitalization................. 41.6% 36.4% 37.3% Deferred income taxes.............................. 1,170.4 1,276.9 1,500.7 Convertible redeemable preferred stock............. Shareholders equity................................ 4,255.5 4,620.4 4,438.1 Return on shareholders equity...................... 13.4%(4) 22.0%(2) 23.2% Book value per share............................... 15.94 16.60 15.57 Total assets....................................... 10,880.3 10,537.9 9,986.5 - - - --------------------------------------------------------------------------------------------------OTHER INFORMATION Capital expenditures............................... 776.9 737.2 702.5 Depreciation and amortization...................... 608.3 567.0 534.1 Effective tax rate................................. 43.4% 38.4% 38.2% Price/earnings ratio............................... 22.6(4) 16.9(3) 18.9 Percent of pretax profit on net sales.............. 9.1% 14.2% 13.8% Market price range of common stock (high/low)...... 60-44 1/860 1/2-52 1/8 61 1/2-39 5/8 - - - --------------------------------------------------------------------------------------------------NOTES TO FINANCIAL SUMMARY-BALANCE SHEET AND OTHER INFORMATION Note: All per share information reflects the September 12, 1986 two-for-one stock split and the June 14, stock split. All amounts reflect the acquisition of Sea World as of December 1, 1989. Financial informati been restated to reflect the adoption in 1988 of Financial Accounting Standards No. 94, Consolidation of Subsidiaries. (1) This percentage has been calculated by including convertible redeemable preferred stock as part of eq convertible into common stock and was trading primarily on its equity characteristics. (2) This percent has been calculated based on net income before the cumulative effect of accounting chang (3) This ratio has been calculated based on fully diluted earnings per share before the cumulative effect changes. (4) These ratios have been calculated based on reported net income. Excluding the two non-recurring 1993 million pretax restructuring charge and $33 million after-tax FAS 109 charge) return on shareholders been 21.2% and the price/earnings ratio would have been 13.8.

- - - --------------------------------------------------------------------------------------------------1990 1989 1988 1987 1986 1985 1 - - - --------------------------------------------------------------------------------------------------$ 14.4 $ (25.7) $ 15.2 $ 75.8 $ (3.7) $ 116.0 $ 1.0 1.0 1.0 1.1 1.0 1.1 7,063.8 6,671.3 5,467.7 4,994.8 4,494.9 3,960.8 3,5 3,147.1 3,307.3 1,615.3 1,422.6 1,164.0 904.7 8 46.1% 52.4% 34.2% 33.0% 31.6%(1) 26.9%(1) 1,396.2 1,315.9 1,212.5 1,164.3 1,094.0 964.7 7 286.9 287.6 2 3,679.1 3,099.9 3,102.9 2,892.2 2,313.7 2,173.0 1,9 24.9% 24.7% 23.9% 22.4% 20.5%(1) 18.9%(1) 13.03 10.95 10.95 9.87 8.61 7.84 9,634.3 9,025.7 7,109.8 6,547.9 5,898.1 5,192.9 4,5 - - - --------------------------------------------------------------------------------------------------898.9 1,076.7 950.5 841.8 796.2 611.3 5 495.7 410.3 359.0 320.1 281.2 240.0 2 37.7% 37.5% 38.3% 42.2% 45.3% 43.4% 14.6 14.4 12.9 16.4 15.5 14.9 12.6% 12.9% 13.0% 12.7% 12.2% 11.1% 45-34 1/4 45 7/8-30 5/8 34 1/8-29 1/8 39 3/4-26 3/8 28 5/8-20 22 7/8-11 7/8 12 3/8-8 - - - ---------------------------------------------------------------------------------------------------

63
INVESTOR INFORMATION - - - -------------------------------------------------------------------------Anheuser-Busch Companies, Inc. is a diversified THE CORPORATION corporation whose subsidiaries include the world's largest brewing organization, the country's

- - - --------------------------------------------------------------------------------------------------1990 1989 1988 1987 1986 1985 1 - - - --------------------------------------------------------------------------------------------------14.4 $ (25.7) $ 15.2 $ 75.8 $ (3.7) $ 116.0 $ 1.0 1.0 1.0 1.1 1.0 1.1 7,063.8 6,671.3 5,467.7 4,994.8 4,494.9 3,960.8 3,5 3,147.1 3,307.3 1,615.3 1,422.6 1,164.0 904.7 8 46.1% 52.4% 34.2% 33.0% 31.6%(1) 26.9%(1) 1,396.2 1,315.9 1,212.5 1,164.3 1,094.0 964.7 7 286.9 287.6 2 3,679.1 3,099.9 3,102.9 2,892.2 2,313.7 2,173.0 1,9 24.9% 24.7% 23.9% 22.4% 20.5%(1) 18.9%(1) 13.03 10.95 10.95 9.87 8.61 7.84 9,634.3 9,025.7 7,109.8 6,547.9 5,898.1 5,192.9 4,5 - - - --------------------------------------------------------------------------------------------------898.9 1,076.7 950.5 841.8 796.2 611.3 5 495.7 410.3 359.0 320.1 281.2 240.0 2 37.7% 37.5% 38.3% 42.2% 45.3% 43.4% 14.6 14.4 12.9 16.4 15.5 14.9 12.6% 12.9% 13.0% 12.7% 12.2% 11.1% 45-34 1/4 45 7/8-30 5/8 34 1/8-29 1/8 39 3/4-26 3/8 28 5/8-20 22 7/8-11 7/8 12 3/8-8 - - - --------------------------------------------------------------------------------------------------$

63
INVESTOR INFORMATION - - - -------------------------------------------------------------------------Anheuser-Busch Companies, Inc. is a diversified THE CORPORATION corporation whose subsidiaries include the world's largest brewing organization, the country's second-largest producer of fresh-baked goods and the country's second-largest theme park operator. The company also has interests in container manufacturing and recycling, malt and rice production, international brewing and beer marketing, snack foods, international baking, refrigerated and frozen foods, real estate development, major league baseball, stadium ownership, creative services, railcar repair and transportation services, and metalized-label printing. - - - --------------------------------------------------------------------------Trademarks of the corporation and its subsidiaries TRADEMARKS include: Anheuser-Busch, the A & Eagle Design, Budweiser, Bud, Bud Dry, Bud Light, King of Beers, Michelob, Michelob Dry, Michelob Light, Michelob Classic Dark, Michelob Golden Draft, Mich, Busch, Natural Light, King Cobra, O'Doul's, Busch Gardens, Adventure Island, Kingsmill, Cardinals, Eagle (for snacks), Rainbo,

Colonial, Earth Grains, Sea World and Shamu, among others. The annual meeting of shareholders will be held on ANNUAL MEETING Wednesday, April 27, 1994, in Los Angeles, Calif. A formal notice of the meeting together with a proxy statement will be mailed to shareholders in mid-March 1994.
- - - -------------------------------------------------------------------------A COPY OF THE COMPANY'S ANNUAL REPORT TO THE ADDITIONAL SECURITIES AND EXCHANGE COMMISSION (FORM 10-K) IS INFORMATION AVAILABLE TO SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO JOBETH G. BROWN, VICE PRESIDENT AND SECRETARY, ANHEUSER-BUSCH COMPANIES, INC., ONE BUSCH PLACE, ST. LOUIS, MO. 63118. A copy of the corporation's "Fact Book," which contains general information about the company, may be obtained by writing to Corporate Communications, Anheuser-Busch Companies, Inc., One Busch Place, St. Louis, Mo. 63118. Anheuser-Busch Companies, Inc. common stock is listed COMMON STOCK

INVESTOR INFORMATION - - - -------------------------------------------------------------------------Anheuser-Busch Companies, Inc. is a diversified THE CORPORATION corporation whose subsidiaries include the world's largest brewing organization, the country's second-largest producer of fresh-baked goods and the country's second-largest theme park operator. The company also has interests in container manufacturing and recycling, malt and rice production, international brewing and beer marketing, snack foods, international baking, refrigerated and frozen foods, real estate development, major league baseball, stadium ownership, creative services, railcar repair and transportation services, and metalized-label printing. - - - --------------------------------------------------------------------------Trademarks of the corporation and its subsidiaries TRADEMARKS include: Anheuser-Busch, the A & Eagle Design, Budweiser, Bud, Bud Dry, Bud Light, King of Beers, Michelob, Michelob Dry, Michelob Light, Michelob Classic Dark, Michelob Golden Draft, Mich, Busch, Natural Light, King Cobra, O'Doul's, Busch Gardens, Adventure Island, Kingsmill, Cardinals, Eagle (for snacks), Rainbo,

Colonial, Earth Grains, Sea World and Shamu, among others. The annual meeting of shareholders will be held on ANNUAL MEETING Wednesday, April 27, 1994, in Los Angeles, Calif. A formal notice of the meeting together with a proxy statement will be mailed to shareholders in mid-March 1994.
- - - -------------------------------------------------------------------------A COPY OF THE COMPANY'S ANNUAL REPORT TO THE ADDITIONAL SECURITIES AND EXCHANGE COMMISSION (FORM 10-K) IS INFORMATION AVAILABLE TO SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO JOBETH G. BROWN, VICE PRESIDENT AND SECRETARY, ANHEUSER-BUSCH COMPANIES, INC., ONE BUSCH PLACE, ST. LOUIS, MO. 63118. A copy of the corporation's "Fact Book," which contains general information about the company, may be obtained by writing to Corporate Communications, Anheuser-Busch Companies, Inc., One Busch Place, St. Louis, Mo. 63118. Anheuser-Busch Companies, Inc. common stock is listed COMMON STOCK and traded on the New York Stock Exchange and the London, Frankfurt, Paris, Zurich, Geneva, Basle and Tokyo Stock Exchanges. It is also traded on the Boston, Midwest, Cincinnati, Pacific and Philadelphia Stock Exchanges and the over-the-counter market. Options in the company's common stock are traded on the Philadelphia Stock Exchange. The stock is quoted as "AnheuserB" in stock table listings in daily newspapers in the U.S.; the abbreviated ticker symbol is "BUD." - - - --------------------------------------------------------------------------Dividends on common stock are normally paid in the DIVIDENDS months of March, June, September and December. - - - -------------------------------------------------------------------------The company's Dividend Reinvestment Plan allows DIVIDEND shareholders to reinvest dividends in Anheuser-Busch REINVESTMENT Companies, Inc. common stock automatically, regularly and conveniently-without service charges or brokerage fees. In addition, participating shareholders may supplement the amount invested with voluntary cash investments on the same cost-free basis. Plan participation is voluntary and shareholders may join or withdraw at any time.

Full details concerning the Anheuser-Busch plan are available from: Boatmen's Trust Company

Dividend Reinvestment Agent P.O. Box 14793 St. Louis, Mo. 63178-4793 (314) 466-1357 (local) (800) 456-9852 (long distance) 64
- - - --------------------------------------------------------------------------TRANSFER AGENT AND Boatmen's Trust Company REGISTRAR510 Locust Street COMMON STOCK St. Louis, Mo. 63101 (314) 466-1357 (local) (800) 456-9852 (long distance) - - - --------------------------------------------------------------------------DIVIDEND Boatmen's Trust Company DISBURSING AGENT 510 Locust Street St. Louis, Mo. 63101 (314) 466-1357 (local) (800) 456-9852 (long distance) - - - --------------------------------------------------------------------------TRUSTEE For all notes and debentures: DEBENTURES/NOTES Chemical Bank 55 Water Street New York, N.Y. 10041 - - - -------------------------------------------------------------------------FISCAL AGENT8% dual-currency Japanese yen/U.S. dollar notes: NOTES The Industrial Bank of Japan, Limited 3-3 Marunouchi 1-Chome Chiyoda-ku Tokyo 100, Japan - - - -------------------------------------------------------------------------INDEPENDENT Price Waterhouse ACCOUNTANTS One Boatmen's Plaza St. Louis, Mo. 63101 - - - -------------------------------------------------------------------------CORPORATE OFFICE One Busch Place St. Louis, Mo. 63118 (314) 577-2000

65

APPENDIX In Exhibit 13 to the printed Form 10-K, the following bar graphs appear, all depicting data for 1989, 1990, 1991, 1992 and 1993: on page 33, "SALES" depicting gross sales and net sales in billions of dollars; on page 34, "TOTAL PAYROLL COST" depicting total payroll cost in millions of dollars; on page 35, "OPERATING INCOME" depicting operating income in millions of dollars; on page 36, "NET INCOME/DIVIDENDS ON COMMON STOCK" depicting net income and dividends in millions of dollars and "EARNINGS PER SHAREFULLY DILUTED" depicting fully diluted earnings per share data; on page 37, "CASH FLOW FROM OPERATIONS" depicting cash flow from operations in millions of dollars; on page 38, "CAPITAL EXPENDITURES/DEPRECIATION AND AMORTIZATION" depicting capital expenditures and depreciation and amortization in millions of dollars; and, on page 40, "SHAREHOLDERS EQUITY/LONGTERM DEBT" depicting shareholders equity and long-term debt in millions of dollars. In Exhibit 13 to the printed Form 10-K, the following photos appear: on pages 33, a photo of the Company's Ice Draft from Budweiser product; on page 35, a photo of the Company's Busch Light and Busch products; and, on page 39, a photo of a partial bag of Eagle brand Thins potato chips.

EX-21

- - - --------------------------------------------------------------------------TRANSFER AGENT AND Boatmen's Trust Company REGISTRAR510 Locust Street COMMON STOCK St. Louis, Mo. 63101 (314) 466-1357 (local) (800) 456-9852 (long distance) - - - --------------------------------------------------------------------------DIVIDEND Boatmen's Trust Company DISBURSING AGENT 510 Locust Street St. Louis, Mo. 63101 (314) 466-1357 (local) (800) 456-9852 (long distance) - - - --------------------------------------------------------------------------TRUSTEE For all notes and debentures: DEBENTURES/NOTES Chemical Bank 55 Water Street New York, N.Y. 10041 - - - -------------------------------------------------------------------------FISCAL AGENT8% dual-currency Japanese yen/U.S. dollar notes: NOTES The Industrial Bank of Japan, Limited 3-3 Marunouchi 1-Chome Chiyoda-ku Tokyo 100, Japan - - - -------------------------------------------------------------------------INDEPENDENT Price Waterhouse ACCOUNTANTS One Boatmen's Plaza St. Louis, Mo. 63101 - - - -------------------------------------------------------------------------CORPORATE OFFICE One Busch Place St. Louis, Mo. 63118 (314) 577-2000

65

APPENDIX In Exhibit 13 to the printed Form 10-K, the following bar graphs appear, all depicting data for 1989, 1990, 1991, 1992 and 1993: on page 33, "SALES" depicting gross sales and net sales in billions of dollars; on page 34, "TOTAL PAYROLL COST" depicting total payroll cost in millions of dollars; on page 35, "OPERATING INCOME" depicting operating income in millions of dollars; on page 36, "NET INCOME/DIVIDENDS ON COMMON STOCK" depicting net income and dividends in millions of dollars and "EARNINGS PER SHAREFULLY DILUTED" depicting fully diluted earnings per share data; on page 37, "CASH FLOW FROM OPERATIONS" depicting cash flow from operations in millions of dollars; on page 38, "CAPITAL EXPENDITURES/DEPRECIATION AND AMORTIZATION" depicting capital expenditures and depreciation and amortization in millions of dollars; and, on page 40, "SHAREHOLDERS EQUITY/LONGTERM DEBT" depicting shareholders equity and long-term debt in millions of dollars. In Exhibit 13 to the printed Form 10-K, the following photos appear: on pages 33, a photo of the Company's Ice Draft from Budweiser product; on page 35, a photo of the Company's Busch Light and Busch products; and, on page 39, a photo of a partial bag of Eagle brand Thins potato chips.

EX-21
SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF DOING BUSINESS INCORPORATION UNDER NAME OF ------------------------Missouri Anheuser-Busch,Incorporated Delaware Campbell Taggart, Inc.

NAME OF COMPANY - - - --------------Anheuser-Busch, Incorporated Campbell Taggart, Inc.

APPENDIX In Exhibit 13 to the printed Form 10-K, the following bar graphs appear, all depicting data for 1989, 1990, 1991, 1992 and 1993: on page 33, "SALES" depicting gross sales and net sales in billions of dollars; on page 34, "TOTAL PAYROLL COST" depicting total payroll cost in millions of dollars; on page 35, "OPERATING INCOME" depicting operating income in millions of dollars; on page 36, "NET INCOME/DIVIDENDS ON COMMON STOCK" depicting net income and dividends in millions of dollars and "EARNINGS PER SHAREFULLY DILUTED" depicting fully diluted earnings per share data; on page 37, "CASH FLOW FROM OPERATIONS" depicting cash flow from operations in millions of dollars; on page 38, "CAPITAL EXPENDITURES/DEPRECIATION AND AMORTIZATION" depicting capital expenditures and depreciation and amortization in millions of dollars; and, on page 40, "SHAREHOLDERS EQUITY/LONGTERM DEBT" depicting shareholders equity and long-term debt in millions of dollars. In Exhibit 13 to the printed Form 10-K, the following photos appear: on pages 33, a photo of the Company's Ice Draft from Budweiser product; on page 35, a photo of the Company's Busch Light and Busch products; and, on page 39, a photo of a partial bag of Eagle brand Thins potato chips.

EX-21
SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF DOING BUSINESS INCORPORATION UNDER NAME OF ------------------------Missouri Anheuser-Busch,Incorporated Delaware Delaware Delaware Delaware Delaware Campbell Taggart, Inc. Busch Entertainment Corporation Anheuser-Busch International, Inc. Metal Container Corporation Busch Agricultural Resources, Inc.

NAME OF COMPANY - - - --------------Anheuser-Busch, Incorporated Campbell Taggart, Inc. Busch Entertainment Corporation Anheuser-Busch International, Inc. Metal Container Corporation Busch Agricultural Resources, Inc.

All other subsidiaries of the Company, considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary as of December 31, 1993.

EX-21
SUBSIDIARIES OF ANHEUSER-BUSCH COMPANIES, INC. ---------------------------------------------STATE OF DOING BUSINESS INCORPORATION UNDER NAME OF ------------------------Missouri Anheuser-Busch,Incorporated Delaware Delaware Delaware Delaware Delaware Campbell Taggart, Inc. Busch Entertainment Corporation Anheuser-Busch International, Inc. Metal Container Corporation Busch Agricultural Resources, Inc.

NAME OF COMPANY - - - --------------Anheuser-Busch, Incorporated Campbell Taggart, Inc. Busch Entertainment Corporation Anheuser-Busch International, Inc. Metal Container Corporation Busch Agricultural Resources, Inc.

All other subsidiaries of the Company, considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary as of December 31, 1993.


				
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